Issuu

The Big Beautiful Bill makes major temporary tax cuts from 2017 permanent for high earners and businesses, reshaping the relationship between federal taxation and high earners.

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Principal Vision with Principal Financial’s Deanna Strable

Why age alone shouldn’t rule out annuities in retirement

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PL U S

Social Security at a Crossroads: Funding shortfall by 2033?

20 26 Sp Pe ec op PA ial le G Se to E ct W 14 io at n ch

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IN THIS ISSUE

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DECEMBER 2025/JANUARY 2026 » VOLUME 18, NUMBER 10

FEATURE

Big, beautiful tax changes By John Hilton Winners in the “One Big Beautiful Bill” tax policy include high-income earners, families with dependents, small-business owners and estate planners.

14 The 2026 People To Watch

special section

December Thought Leadership Series

IN THE FIELD A classic album inspires Preston Cherry to teach the next generation of financial professionals while helping his own generation live their best lives.

LIFE

26 Life insurance can shield your estate

4 Principal vision

Deanna Strable is leading the 145-year-old Principal Financial Group into a new era of growth in the retirement and benefits space while remaining focused on small and midsize businesses.

30 W hy age alone shouldn’t rule out annuities in retirement By David Paul

Buyers in their 70s and even early 80s still have access to a wide range of products.

HEALTH/BENEFITS 34 Can government ease the LTC crisis? By Susan Rupe

How government can provide support and how it will be funded are questions that plague policymakers.

ADVISORNEWS

38 The missing link of LTC planning By Les Robinson

20 P lanning in the key of life By Susan Rupe

INTERVIEW

ANNUITY

By David E. Appel and Aviva Sapers

State estate tax bills can threaten the inheritance of a home, family business or other assets.

Advisors must help clients adjust their mindsets before beginning the LTC planning conversation.

INSURTECH

40 How agentic AI is rewiring insurance for 2026 By Rayne Morgan

Agentic AI is the next step beyond today’s chatbots.

IN THE KNOW

42 R egulators defend close relationships with industry By John Hilton

The NAIC has a conflict-of-interest policy, but it is silent on regulators leaving public service to immediately lobby their former colleagues.

INSURANCENEWSNET 20 Erford Road • Suite 304 • Lemoyne PA, 17043 717.441.9357 www.InsuranceNewsNet.com PUBLISHER EDITOR-IN-CHIEF MANAGING EDITOR SENIOR EDITOR

Paul Feldman John Forcucci Susan Rupe John Hilton

MARKETING DIRECTOR SENIOR CREATIVE DIRECTOR EMAIL & DIGITAL MARKETING SPECIALIST MARKETING MANAGER

Jenn Becker Jacob Haas Megan Kofmehl Sorayah Talarek

DIRECTOR OF SALES NATIONAL ACCOUNT DIRECTOR NATIONAL ACCOUNT DIRECTOR STAFF ACCOUNTANT

Ashley McHugh Brian Henderson Tobi Schneier Katie Turner

Copyright 2025 Insurance & Financial Media Network. All rights reserved. Reproduction or use without permission of editorial or graphic content in any manner is strictly prohibited. How to Reach Us: You may e-mail editor@insurancenewsnet.com, send your letter to 20 Erford Road, Suite 304, Lemoyne PA 17043, fax 866.381.8630 or call 717.441.9357. Reprints: Copyright permission can be obtained through InsuranceNewsNet at 717.441.9357, Ext. 125, or reprints@insurancenewsnet.com. Editorial Inquiries: You may e-mail editor@insurancenewsnet.com or call 717.441.9357, ext. 117. Advertising Inquiries: To access InsuranceNewsNet Magazine’s online media kit, go to www.innmediakit.com or call 717.441.9357, Ext. 125, for a sales representative. Postmaster: Send address changes to InsuranceNewsNet Magazine, 20 Erford Road, Suite 304, Lemoyne PA 17043. Please allow four weeks for completion of changes. Legal Disclaimer: This publication contains general financial information. It should not be relied upon as a substitute for professional financial or legal advice. We make every effort to offer accurate information, but errors may occur due to the nature of the subject matter and our interpretation of any laws and regulations involved. We provide this information as is, without warranties of any kind, either express or implied. InsuranceNewsNet shall not be liable regardless of the cause or duration for any errors, inaccuracies, omissions or other defects in, or untimeliness or inauthenticity of, the information published herein. Address Corrections: Update your address at insurancenewsnetmagazine.com.

Source: Federal Reserve

December 2025/January 2026 » InsuranceNewsNet Magazine

WELCOME LETTER FROM THE EDITOR

Looking ahead: 5 touchpoints for 2026

he next 12 months are set to offer new opportunities for agents and advisors — if you’re ready. Here are five touchpoints to keep in mind as you begin to navigate the changing tides of 2026.

1. Guaranteed/indexed products go mainstream

We’ve long been hearing about the demand for accumulation-plus-guaranteed-income solutions. According to LIMRA research, the annuity market is projected to top $400 billion in 2025, driven by demographics and a desire for lifetime income. That means products such as fixed indexed annuities, registered index-linked annuities and variable/universal life hybrids aren’t just niche anymore; they’re core. Carriers are rolling out new products to meet this need. And there’s a wave of interest in making guaranteed income a staple in benefits plans, including as part of 401(k)s.

2. Tech-driven service and lead generation

The carriers’ focus on personalization, digital servicing and efficiency is no longer “nice to have” — it’s table stakes. Life insurers are investing in generative artificial intelligence, real-time underwriting, digital onboarding and agent tools that deliver insights. For annuities, as we reported recently, there’s even a claim of a 94% reduction in cycle times via digital transfers. This means the competitive advantage increasingly lies not only in product knowledge but in how you present, engage and follow up. If you don’t have digital front- and back-office support, younger tech-savvy prospects will go elsewhere. How fast can you produce handouts, illustrations and proposals? Can you track touches? Do you have lead-generation or 2

social media engines that you can count on for a steady flow of new business?

3. Recruiting — once again — is a priority

You’ve heard this forever. The industry is still heavily male-dominated. Firms — because they must — are starting to recognize the untapped potential of female advisors and of newer entrants who aren’t locked in to old patterns. Many studies we’ve reported on reveal the trend that younger consumers want flexible, goalbased products and online tools — not “old school” paper-only agents. Also, as we’ve reported often this year, advisors are losing business as women outlive their husbands and reject the “family advisor” who may have ignored them for years. In the near future, women are — and will be — controlling more invested wealth than ever before. And many may prefer to have a female advisor. Are you thinking about retaining a surviving spouse by building a relationship with both partners? If so, you must expand your lens. Look outside “the usual,” change with the times and embrace relational selling and digital fluency.

4. IMO/agency model gets a boost

With carriers chasing scale and consolidation, the appetite for boutique, independent marketing organizations or agencies is rising. And being independent means you’re not handcuffed to one carrier’s product suite. Take a look at your IMO/agency

InsuranceNewsNet Magazine » December 2025/January 2026

partner now. Are they supporting your business in meaningful ways (leads, marketing, back office)? For IMO/agency owners: Reinforce your value add. As we’ve reported throughout the year, agents want service, support and speed.

5. Market turbulence = opportunity for trust building

Interest-rate swings. Regulatory pressure and changes. Inflation. Demographic uncertainty. Fear of outliving one’s wealth. The environment is complex. For agents and advisors, however, that worry and concern create demand. Clients are asking who is looking out for them. Today, what’s needed is the consulting advisor model: deep discovery, relationship-based, stays in touch and takes a lifetime view. This opens opportunities for scheduling annual (or even semiannual) strategic check-ins with clients. Review scenarios, walk through “what could go wrong” and how you’ve planned for that, what you’re watching for, etc. Position yourself as the guardrail. Keep these touchpoints in mind as you navigate 2026. Use them to inform your conversations, your marketing, your recruiting and your prospecting. Position yourself to be ahead of the curve — as a trusted advisor who can help clients thrive in whatever comes next. John Forcucci Editor-in-chief

NEWSWIRES Q U O TA B L E

Insurers must sink or swim

The insurance industry continues to rocket through perhaps the most dynamic era of change in its history, with technology, climate change, consolidation and legal/regulatory demands creating relentless pressure. Insurers that are responding to these changes will survive, and even thrive, Deloitte reported in its 2026 global outlook. Those that aren’t will fall behind. Deloitte projects a “bifurcated industry” in which tech-forward carriers thrive while laggards struggle under cost and compliance pressures. Weather events are making it more expensive for primary firms to transfer their risk, Deloitte said. Tightening reinsurance terms and increased risk retention are driving up loss ratios, adding to a $183 billion global protection gap, the outlook found.

The market is walking a tightrope.” — Dave Sekera, Morningstar chief U.S. market strategist

HEALTH CARE COSTS ARE TOP VOTER CONCERN

THE ECONOMY IS ‘RESILIENT,’ BANK CEOS SAY

“Resilient” is the latest buzzword on Wall Street as the heads of the nation’s largest banks look over an economy they say is able to withstand setbacks, adapt to changes and continue expanding. When JPMorgan Chase, Citigroup and Wells Fargo reported their most recent quarterly earnings, their CEOs used the word “resilient” to describe the U.S. economy and its consumers. “While some economic uncertainty remains, the U.S. economy has been resilient and the financial health of our clients and customers remains strong,” Wells Fargo CEO Charlie Scharf said in a news release. His opinion was echoed by JPMorgan Chase CEO Jamie Dimon, who said, “While there have been some signs of a softening, particularly in job growth, the U.S. economy generally remained resilient.” Citigroup’s CEO, Jane Fraser, said that the global economy has “proved more resilient than many anticipated” and that “America’s economic engine is indeed still humming.” DID YOU

KNOW

Lowering health care costs is the top priority for American voters across party lines, even surpassing housing, jobs, crime and immigration. The Families USA poll revealed bipartisan support not only for extending health care tax credits but for broader reforms to bring down costs.

More than 4 in 10 voters (43%) said lowering health care costs is the most important issue for Congress and the president to address — surpassing housing (35%), jobs (31%), immigration (24%) and crime (21%). Health care affordability ranks as the No. 1 priority for Democrats and Independents and the second priority for Republicans. Nine in 10 voters (91%) said it’s important that Congress and the president act to lower health care costs. The poll also reveals why Americans want action: 42% say the most important reason for Congress to reduce health care costs is to reduce stress on family budgets and bring down the cost of living, while 36% say it’s to give access to health care to those who cannot afford it now.

TARIFFS DRIVE P/C CLAIMS HIGHER

Tariffs are rewriting the math of content claims. Higher costs for consumer goods are impacting the cost of property/casualty insurers’ paying claims for contents of homes that are damaged or destroyed. A white paper from Adjusto described how tariffs are raising the cost of paying claims for contents. Decades of economic research show that tariffs are overwhelmingly passed down the supply chain, the report said. Importers adjust prices, wholesalers increase margins, retailers raise sticker prices and consumers ultimately bear the brunt. This matters to claims leaders because insurance companies reimburse the consumer’s real cost of replacement. In practice, tariffs mean that the replacement price of a refrigerator, laptop or sofa after a loss is now 10%–15% higher than it was last year. These increases are layered on top of the ordinary inflation and product shortages that already exist. Tariffs do not create new categories of loss — but they amplify the severity of claims insurers already face.

The Social Security Emergency Inflation Relief Act, proposed by some Senate Democrats, would increase Social Security and Veterans Affairs benefits by $200 monthly for six months. Source: NBC News

December 2025/January 2026 » InsuranceNewsNet Magazine

INTERVIEW

Deanna Strable rose from actuarial intern to CEO of Principal Financial Group. Now she’s leading the 145-year-old company into a new era of retirement, benefits and technology-driven growth. An interview with Paul Feldman, publisher

InsuranceNewsNet Magazine » December 2025/January 2026

PRINCIPAL VISION — WITH DEANNA STRABLE INTERVIEW

eanna Strable stepped into a role as an intern at Principal Financial Group 36 years ago. After she headed up a number of areas in the business — ranging from dental to life to benefits — her path led her to the corner office last year, where today she is building on the company’s success. “Our focus is around retirement, it’s around asset management, it’s around benefits and business owner solutions, with a keen focus on small- to medium-sized businesses,” she said. “That’s where we’re leaning in, from a growth perspective, to focus on those areas where we have differentiation and ultimately bring our solutions together to be there for our customers worldwide.” For Strable and Principal, although developing needed financial products is important, “we really think in terms of solutions,” she said. In this interview with InsuranceNewsNet Publisher Paul Feldman, Strable talks about the many product areas of Principal Financial Group and what she sees in the company’s future. Paul Feldman: Tell us a bit about Principal Financial Group and tell us about yourself, because you have a fascinating story. You started in the industry basically as an actuarial assistant and went from that to CEO of a major insurance company. Tell me about your journey. Deanna Strable: It’s something that I never would have anticipated. I stepped in as an intern here at Principal 36 years ago. I started in the actuarial realm and spent about five or six years focused on those more technical roles. For the lion’s share of my career, I ran different parts of our business, all focused on our insurance business. I started out focusing on dental, then I ran our group benefits business, and that expanded into disability and life insurance, and then I ran our affiliated advisor channel. Then about seven or eight years ago, I was asked to move into our chief financial officer role. Beginning in 2017, I supported Dan Houston, our CEO, as his CFO. In November 2024, I moved into this role. This has been a fascinating journey,

15-plus roles while I’ve been here at Principal. Each of them gave me an incredible background that positioned me for this role.

areas where we have differentiation and ultimately bring our solutions together to be there for our customers worldwide.

Feldman: What do you love most about your job?

Feldman: What are your most exciting products? And what about heading into the future?

Strable: The challenges, the people, the culture of this company. It’s the incredible work this company — but also this industry — does. Des Moines, where we’re headquartered, is somewhat of a small town. A lot of people know Principal, and so I can’t go anywhere without people coming up to me, and ultimately, thanking me. I meet retirees who say things like, “Every day or every week or every month, I’m getting a check from Principal. And that makes my life

Strable: It’s funny, because you ask about products and, honestly, we really think in terms of solutions. They are around three areas: First, retirement. We are a leader in the U.S. retirement business. A lot of that is seen in our presence around 401(k)s, but we are also very strong in defined benefit, employee stock ownership plans, nonqualified, pension risk transfer. We’re thinking about all that we can do for a customer — both an employer and an employee

That’s where we’re leaning in, from a growth perspective, to focus on those areas where we have differentiation and ultimately bring our solutions together to be there for our customers worldwide. and my retirement much more secure and gives me the ability to do the things I want to do.” I run into people who have benefited from our ability to give them a life insurance benefit, a disability benefit. That’s great, because the people are important, that’s what usually keeps you at a company. But when it comes back to the incredibly important work that we do as a company and as an industry, that’s what makes it all worthwhile. Feldman: Over the years, Principal has evolved. What’s your big focus today? Strable: We started 145 years ago as a life insurance company, here in Des Moines, Iowa. Fast-forward to today, we’re a global financial services company. We have customers in 80 countries. Our focus is around retirement, it’s around asset management, it’s around benefits and business owner solutions, with a keen focus here on small- to medium-sized business. That’s where we’re leaning in, from a growth perspective, to focus on those

— around retirement. That includes recordkeeping, asset management, income solutions and creating a relationship with those employees who don’t have an advisor helping them — and making sure that we’re there for them to help them on their retirement journey. That is a keen focus of ours here in the U.S. and in a couple of locations outside of the U.S. in emerging markets. Our focus is on the small- to mediumsized businesses. Think of that as employers with up to 1,000 employees, but, in particular, for our benefits business, our average customer could have 40, 50, 60, 75 employees. A lot of times, smaller companies don’t have human resource professionals focused on benefits and so they look for their provider as well as their advisors to help them with that. We offer so many solutions for them, whether they are retirement focused, whether they are employee benefit focused or whether they are life and disability solutions that help a business owner — think about succession planning, think about key person.

December 2025/January 2026 » InsuranceNewsNet Magazine

INTERVIEW PRINCIPAL VISION — WITH DEANNA STRABLE

Photo credit: NASDAQ Inc.

And then, the final area that we’re focused on is asset management. A keen focus in asset management is on solutions around retirement. What are the suitable options for people thinking about saving for retirement? Then it’s trying to leverage that to customers around the globe, through our joint ventures, as well as directly. Feldman: What are your strategies for the next five years? Where do you see some of the biggest opportunities in today’s crazy market? Strable: To me, it’s a lot about focus. You can chase hot products, you can create hot solutions, but it really is about where you have differentiation. Where do you have the capabilities to win? I think we’ve proven in a number of our businesses that we’re outpacing the market, relative to growth, by focusing on those places where we have the ability to win. Real estate is one business that, specifically within asset management, has always been core to our strategy. Now we’re trying to build beyond real estate, to areas like infrastructure, like private credit, that are attractive to institutional investors but also to retirement investors as well. If you think about 401(k)s, leaning into places where we can leverage our entire 6

retirement suite, whether it is defined benefit, employee stock ownership plans, nonqualified. A lot of our nonqualified is funded by life insurance and PRT. Pension risk transfer will continue to be a growth area for the industry, as well as for Principal. We’ve been in that business for 50-plus years; we have recordkeeping, we have actuarial services, we have asset management and we can meet the needs of retirees as they go through their retirement journey. Feldman: Would you say that your business is mostly employee benefits on the group side, or are you into the independent distribution for individual products? Strable: I’d say that we’re business focused here in the U.S. both on retirement and benefits. We do have a proprietary advisor force, about 1,200 to 1,300 of those who offer our insurance products, our employee benefits products, our retirement products, our asset management. But beyond that, we work with third-party distribution, we have wholesalers. And ultimately, they work with advisors and consultants around the globe to offer our products to them. I would say that our employee benefits business is a key focus for us, it’s about 20-some percent of our

InsuranceNewsNet Magazine » December 2025/January 2026

overall earnings; it has been growing faster than the industry. We’re keenly focused on that target market of the small to medium-sized businesses, and we’re designing everything around that. Whether it is our underwriting process, our product design, our distribution, our technology strategy, it’s all focused on being able to drive higher top-line growth, because those are resilient and growing parts of the market. But it’s also ensuring that we have the claim experience and loss ratio experience that allows us to have very market-leading and stable margins as well. Feldman: Principal has a number of different products, and one that stood out to me is your registered index-linked annuity, which has gone from almost nothing to well over $1 billion in sales. Do you see that as a growth opportunity? Strable: Whether you look at Principal and our success that we’ve had over the last few years in RILA, or whether you look at the industry overall, RILA has been big from a growth perspective. If we look at where we are in the annuity business — either in group annuity or more on an individual basis — it’s in the variable annuity or the RILA space. We did exit the retail fixed annuity business a couple of years ago.

We see some great demand for that product, and we’ve spent some time the last few years working on product development as well as how to focus on going to market there. We built our first product in 2023, and we added to that in 2024, when we added a guaranteed lifetime withdrawal benefit. I think the need is big. Obviously, annuities and RILA are wonderful products for those who are thinking about income through retirement, and RILA fits in there. We primarily focus our RILA offering either through our affiliated advisors or as a component or a solution for the participants of our retirement plan, so our 401(k) benefits. We have 14 million retirement participants, and we’re continuing to focus on offering that product to them as well. So we do see some great trends that will continue to drive growth, and we’ll continue to focus on that as well. Feldman: How do you see annuities moving into 401(k) plans? Strable: That’s something that has been talked about for a while and I think it will get traction, but the industry needs to figure out how to make it easier. And to make it easier, it needs to be part of the target date. So it’s not a separate selection, it’s actually embedded in how people think about saving for their retirement. And then at some point it automatically starts to buy annuity solutions that can pay out after they’ve retired. I think what’s difficult is that it’s a three-part sell. You must sell the advisor that this is something that they want to promote to their employer customers. Then you must sell the fiduciaries at the employer that this is a product that they want within their retirement plan. And then, ultimately, unless you can make it easy within the target date or the other qualified default options, you must sell the participants that it’s where they want their money to actually go. And that’s a complicated process. Feldman: Is the annuity side of the business taking place mainly with the older generation?

S-PA_47_25-10-20_INN-Media-Deliverables

INTERVIEW PRINCIPAL VISION — WITH DEANNA STRABLE

You can chase hot products, you can create hot solutions, but it really is about where you have differentiation. Where do you have the capabilities to win?

Strable: That’s where it will have the biggest impact in the shorter term, but ultimately, it’s a solution that every individual needs. A 21-year-old doesn’t need to put any of their 401(k) balance to an annuity, but once they hit 50 or 55, a portion of their balance can start to buy annuity options that then over time will benefit them as they move into retirement. So that will take time; that’s why we say it is an important benefit, but it’ll be a slower one to grow, because you need demographics to ultimately help that as well. Feldman: Principal has a full portfolio of life insurance products. Is that something you do on the retail side or is it mostly through the employee benefit side? Strable: We refocused our life insurance strategy a couple of years ago. We exited the more pure retail life insurance product. Our focus now is on the employee benefit side, using the same type of products; it’s using term, it’s using variable life, it’s using indexed life. But we’re less about selling the product and we’re more about selling a solution for a business owner or a business. The largest portion of our life insurance sales funds nonqualified deferred compensation. And so that is a part of our overall retirement solution sleeve, and we’re just having to fund it — a portion of it — with life insurance. We also offer key person or succession planning. How do you go to a company that is owned by a family and help the owners to figure out how to solve the problem of business succession, whether it’s to their next generation of family members or to those employees who could be in that succession path? Our focus is much less on the pure individual retail market, and we are laser focused on offering solutions for the employer, the business owners and their key executives. Feldman: Tell us a little bit about what Principal is offering in technology and where you see that going, especially in regard to artificial intelligence. Strable: I think if you look over our long history, technology has always been a piece of that. Whether it’s how you

InsuranceNewsNet Magazine » December 2025/January 2026

PRINCIPAL VISION — WITH DEANNA STRABLE INTERVIEW interact with your customers, how you interact with your advisors or how you allow your employees to be the most productive that they can be, technology is key. Ultimately, technology’s focus must be solving business problems. When I think about AI and generative AI, there are so many places that it can help our employees, our customers, our advisors, and we are focused on making sure that we do that. We were a pioneer in accelerated underwriting, and over the last six or eight months, we’ve rolled out our 2.0 version of accelerated underwriting. That allows 50%, 60% of our applicants to go through the underwriting process quickly and seamlessly. AI also allows us more ways to interact with our customers, whether it’s using chat or eliminating the need for the call. Or whether it’s making our engagement center associates more productive by giving them — at their fingertips — all the tools and information they need to meet the needs of that customer effectively. Or how you use AI to make our technology professionals more effective, for example, by providing that first draft of code that they can then make more functional using their expertise. That can significantly increase the productivity of the information technology professionals we have around the globe. And the last example is around claim management. Whether it’s regarding dental, disability or life, there are very smart AI solutions that can help us be much more efficient and effective, to ensure that we are paying the right claims in the fastest manner that we can. There is so much art of the possible relative to technology, but it comes back to business focus. Not technology for the sake of technology, but technology to solve customer needs. And then making sure you’re focused on the places where it will have the greatest impact. Feldman: I’m asking you to take out the crystal ball. What do you see as the biggest opportunity for advisors and agents in today’s market? Strable: People need advisors and agents. Whether I talk to people who make $50,000 a year or people who make much more than that, the products and how

Whether it’s regarding dental, disability or life, there are very smart AI solutions that can help us be much more efficient and effective, to ensure that we are paying the right claims in the fastest manner that we can. they can save for their retirement and plan for everything that could happen to them are complicated. And in a lot of situations, people don’t want to spend the time needed to be an expert, which then continues to reinforce the importance of advisors in that process. But the other thing I would say is that advisors must react to working differently with their customers. That will mean using technology, using digitization, using personalization and making that interaction more relevant to not just the customers they’re working with today, but the customers that they will want to work with tomorrow. It’s up to carriers like Principal, but also advisors, to figure out the way to meet those customers where they are and in the way that they want to interact. Feldman: Because our federal government is not going to fund our retirement very well. Strable: We’ve been talking about personal responsibility for decades. We’re seeing that come to life, because people are wondering about retiring without the safety net of Social Security. And from a retirement perspective, they see the need for products offered by their employer, but also their ability to save along the way, as well as individual retirement accounts and those types of things. Because it will take all of those resources to allow individuals to retire successfully. Feldman: Is there a question that I didn’t ask that I should have? Strable: One of the things that I get asked a lot is what competitor I worry about, or what keeps me up at night relative to our ability to be successful. And one of the things I always say is, it’s not a competitor that worries me, it’s how do we continue

to make what we do relevant to customers? No one wakes up and says, “Today I’m going to prioritize buying a life insurance product or saving more in my retirement.” It’s just not front of mind. If we can’t figure out how to make it relevant, how to make it easy, how to make it personalized, that is going to cause the demise of this industry. And so that must be my focus it must be my team’s focus, and it must be our industry’s focus, because that’s what’s going to continue keeping this industry alive and successful. Feldman: To build on that answer, what are some of the biggest threats that we face as an industry? For example, how do we convince new people to come into this business? Strable: The biggest concern is how we continue to attract talent to this industry. Advisors are, in some situations, a declining group. How do we make it exciting for people to understand the impact that advisors can have not only on this industry, but also on people’s lives? To be able to continue to attract and retain top talent would allow this industry to be successful. How we make it relevant and how we continue to support and encourage a growing advisor population are the biggest challenges that this industry has. Feldman: How do we fix that? Strable: We must ask, “How do you make it easy?” We must look at how you embed yourself into university programs, to help students understand that this is a career that is important, that uses skill sets that they’re learning, but allows them to make a difference. And in some situations, it allows them to do it in a very entrepreneurial way. It will take all of our efforts to make sure that’s a priority for this industry.

December 2025/January 2026 » InsuranceNewsNet Magazine

COVER STORY

The One Big Beautiful Bill Act makes major temporary tax cuts from 2017 permanent for high earners and businesses, reshaping the relationship between federal taxation and high earners. By John Hilton

he federal tax outlook changed dramatically when Donald Trump defeated Joe Biden in November 2024 — both for the short term and the long. For starters, it meant that the Tax Cuts and Jobs Act of 2017 — Trump’s signature accomplishment from his first term — could be extended. Congress did so in July. The One Big Beautiful Bill Act extended a foundational change to the entire structure of federal taxation and will result in billions of dollars remaining in the hands of taxpayers over the coming decade. Much of that money will end up in investments, annuities, life insurance and individual retirement accounts. Winners in the “Big Beautiful Bill” tax policy include high-income earners, families with dependents, small business owners and estate planners. One of the biggest tax changes is to the estate tax exemption. The OBBB permanently increases the federal lifetime gift, estate and generation-skipping transfer tax exemptions to $15 million per person ($30 million for married couples) starting Jan. 1, 2026, with future increases indexed for annual inflation. The new law repealed the TCJA’s sunset provision, which would have reduced the exemption to about $7 million per person in 2026. That is a major tax change for high-net-worth clients. But Joseph Spada, private wealth advisor at Summit Financial, cautions clients not to attach too much weight to the word “permanent.” “Some clients feel like, ‘Well, since it’s permanent, I don’t really need to do anything, because it won’t get cut in half,’” Spada said. “Well, if they have the money, they still should. Because it may not be permanent six years from now, and whatever you get out of your estate now is gone.”

Charitable giving rules overhauled

One of the biggest tax changes the OBBB makes involves charitable giving. In fact, Steven Cashiola, a California-licensed certified public accountant, said taxpayers who itemize would be wise to accelerate any charitable giving into 2025. Starting next year, there is an abovethe-line deduction of up to $2,000 10

InsuranceNewsNet Magazine » December 2025/January 2026

BIG, BEAUTIFUL TAX CHANGES COVER STORY (married filing jointly) for taxpayers who do not itemize, Cashiola explained. This is a new benefit available for the majority of taxpayers in 2026. Taxpayers who itemize will see several limitations take effect. For starters, deductions (cash and noncash) will be subject to a floor of 0.5% of adjusted gross income. Similar to medical deductions, charitable contributions below 0.5% of adjusted gross income will not be allowed. “Taxpayers in the 37% marginal bracket lose the effectiveness of the deduction,” Cashiola noted. “Beginning next year, allowed charitable deductions will be limited to a 35% benefit. This loss is permanent and not available to carry over to the following year.” The state and local tax deduction also changed significantly in the OBBB. Taxpayers who itemize their deductions to reduce their federally taxable income can deduct up to $10,000 for 2024 or $40,000 for 2025 — of property, sales or income taxes already paid to state and local governments. This SALT cap was originally set at $10,000 by the TCJA. However, the OBBB increased the cap to $40,000 for 2025, subject to a phasedown. The SALT deduction can be especially attractive for taxpayers in high-tax states and for high-income filers as it avoids double taxation. The new schedule calls for a phasedown of the $40,000 SALT cap for individual taxpayers or couples making above $500,000, at a 30% rate. The phase-down threshold increases by 1% each year through 2029. As income rises, the $40,000 SALT cap phases down to $10,000, meaning that the highest-income taxpayers can deduct up to $10,000 in SALT. SALT reverts to the $10,000 limit (previously set by the TCJA) in 2030, with no income limits. When analyzing the highest average deduction claimed in each state, the Bipartisan Policy Center found coastal states (California, Connecticut, Maryland and New York) and other selected states (Illinois, Minnesota and Utah, for example) generally see the largest deductions. “It is likely that with the increased deduction cap, these states will see an even greater benefit compared to states with

TAX

Major changes for 2026 SALT Deduction:

The SALT deduction cap raised to $40,000 for incomes under $500,000 ($250,000 for married filing separately).

Overtime Pay Deduction:

Certain workers can claim a dollar-for-dollar deduction for a designated amount of overtime pay covered by the Fair Labor Standards Act. Income eligible for the deduction is capped at $12,500 (single) and $25,000 (married filing jointly).

No Tax on Tips Deduction:

A dollar-for-dollar deduction for a designated amount of tips earned by workers where tipping is customary. Income eligible for the deduction is capped at $25,000.

Car Loan Interest Deduction:

Anyone purchasing a new car and taking out a loan is eligible to deduct their loan interest. The deduction is limited to $10,000 of qualified interest. Vehicle must have a “final assembly” in the U.S.

Child Tax Credit:

Increased from $2,000 to $2,200 per child, with permanent phaseout thresholds: $200,000 (single) and $400,000 (married filing jointly).

Marginal Rates:

The top tax rate remains 37% for individual single taxpayers with incomes greater than $640,600 ($768,700 for married couples filing jointly). The other rates are: • 35% for incomes over $256,225 ($512,450 for married couples filing jointly) • 32% for incomes over $201,775 ($403,550 for married couples filing jointly) • 24% for incomes over $105,700 ($211,400 for married couples filing jointly) • 22% for incomes over $50,400 ($100,800 for married couples filing jointly) • 12% for incomes over $12,400 ($24,800 for married couples filing jointly) • 10% (the lowest rate) for single individuals with incomes of $12,400 or less ($24,800 for married couples filing jointly)

Alternative Minimum Tax Exemption Amounts:

The exemption amount for unmarried individuals is $90,100 and begins to phase out at $500,000 ($140,200 for married couples filing jointly for whom the exemption begins to phase out at $1 million).

Estate Tax Credits:

Estates of decedents who die during 2026 have a basic exclusion amount of $15 million, up from a total of $13.99 million for estates of decedents who died in 2025.

EmployerProvided Child Care Tax Credit:

The maximum amount of employer-provided child care tax credit increases from $150,000 to $500,000 ($600,000 if the employer is an eligible small business).

529 Plan Expansion:

Anyone taking a withdrawal from a 529 Plan or considering starting a plan will have more options for what qualifies as an eligible expense — specifically, up to $20,000 to pay for K-12 expenses (up from the previous $10,000).

December 2025/January 2026 » InsuranceNewsNet Magazine

COVER STORY BIG, BEAUTIFUL TAX CHANGES relatively small average deductions, such as Wyoming, South Dakota, and North Dakota,” the BCP wrote in its analysis.

HNW tax strategies

There are a number of HNW tax strategies, many of them traditional options, that became clearer once the OBBB passed. Employing these strategies can save wealthy clients a substantial amount of money in taxes, Spada said. The biggest change for wealthy taxpayers is the estate tax exemption, bar none, he said. “If you’re a high-net-worth person, the biggest benefit is to maintain the $30 million lifetime exemption, because if that got cut in half, it would have been

pay taxes on realized capital gains for the year, meaning they’ll only consider their net gains — the amount gained minus any investment losses they realized. “The harvesting benefit is tax deferral,” Spada said. “If you don’t have to pay the tax now, those tax dollars stay with you in your portfolio. That’s the first benefit. But for wealthy people, they will always own stocks and they can hold their stocks and die with them. They get a step-up in basis, and they never have to pay tax.” Other HNW tax strategies, some in concert with estate planning, include: Lock in lifetime gifts. Even though the estate tax exemption increased permanently, clients should consider making substantial gifts to take advantage of

Tax-loss harvesting — selling investments at a loss and using those losses to offset gains in other investments — is something wealthier clients should be looking at every year. $15 [million],” Spada said. “That extra $15 million is saving your family 40% in estate tax, plus that’s growing an index for inflation. So that by far outweighs anything else in these changes.” Many wealthy clients will set up an LLC or create a partnership to remove money from their taxable estate, he explained. “They’ll put $50 million of real estate in a partnership and discount to get down to $30 million using lack of marketability, lack of control, discounts and give 99% of those limited partnership units to their kids,” Spada said. “There’s nothing new about that. People have been doing that for years, but still a lot of reason to get that money out as soon as you can.” Tax-loss harvesting — selling investments at a loss and using those losses to offset gains in other investments — is something wealthier clients should be looking at every year. Clients can then take the money from the sale and use it to buy an investment that fills a similar role in their portfolio. When clients tax-loss harvest, they’ll 12

high valuation levels. Future growth of a taxable estate can be slowed by gifting appreciating assets sooner. Optimize trust structures. The increased estate tax exemption means the focus of trusts can shift from tax reduction to income tax efficiency. This can be accomplished through the use of irrevocable trusts, such as spousal lifetime access trusts or grantor retained annuity trusts, to transfer assets while leveraging valuation discounts. Maximize tax-advantaged accounts. Maximize contributions to any tax-advantaged accounts, such as 401(k)s, IRAs and health savings accounts to reduce taxable income. For business owners, options like SEP IRAs or defined benefit plans can allow for even higher tax-deductible contributions.

Small business tax changes

The OBBB included plenty of good tax news for businesses as well. Small business owners can take advantage of these tax breaks immediately for expenses dating

InsuranceNewsNet Magazine » December 2025/January 2026

back to Jan. 20, 2025. “Competitive, pro-growth tax policy is essential to strengthen the economy and raise wages for workers,” the U.S. Chamber of Commerce said in a statement following the OBBB passage. Here are the significant business tax changes in the OBBB: Permanent qualified business income deduction: Makes permanent the 20% deduction for QBI, with phaseout ranges expanded, thresholds indexed for inflation and a $400 minimum deduction introduced. Expanded Section 179 expense deduction: The deduction limit is raised to $2.5 million with a $4 million phaseout threshold for property placed in service after Dec. 31, 2024. Covered examples include small businesses making new equipment or software purchases. Amounts are indexed for inflation after 2025. Business interest limitation relief: Adjusted taxable income calculation reverts to earnings before interest, taxes, depreciation and amortization starting in 2025, easing restrictions compared to earnings before interest and taxes. Permanent excess business loss limitation: The deduction limits for excess business losses — $313,000 for a single filer and $626,000 for joint filers in 2025 — remain in place permanently, converting excess to net operating loss carryforward. There are still more potential tax changes to come. As this issue went to press, more than 150 organizations had called on Congress to permanently extend the enhanced premium tax credits that make health care more affordable for millions of Americans. “Without a timely extension of the enhanced premium tax credits, more than 20 million people — including about 5 million small business owners and self-employed people, along with 6 million older adults — will see their health care costs skyrocket,” the group wrote in a letter to lawmakers. InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on X @INNJohnH.

SOCIAL SECURITY AT A CROSSROADS COVER STORY

Social Security at a Crossroads The Social Security program faces crucial issues including a projected trust fund shortfall by 2033, an aging population that’s reducing the worker-to-beneficiary ratio and ongoing political gridlock.

By John Hilton

ith the Social Security program in need of a legislative fix and Republicans in a strong position of power, might 2026 be the year the looming future shortfall is addressed? Don’t count on it, financial experts say. “I don’t believe there is any chance that Republicans will tackle any meaningful solutions to Social Security in the run up to the 2026 mid-term elections,” said Robert R. Johnson, professor of finance at Creighton University. “Social Security reform is a politically charged issue and won’t be dealt with prior to the mid-term election.” While Congress is content to continue punting the problem to future legislators, clients need not worry about their Social Security benefits — yet, Johnson said. Paraphrasing Mark Twain, Johnson said that “the imminent death of Social Security is greatly exaggerated. “Social Security may certainly look different in the future, but it is, has been and remains an important financial backstop for individuals and I am hardpressed to conceive of it completely

going away,” he added. But changes to the venerable program are inevitable. The looming shortfall comes during a critical period in the program. The next five years will bring a pivotal shift in the demographic and economic landscape of Social Security as the last baby boomers join the first Generation Xers, who begin turning 65 in 2030. “That will be a lot of pressure on the system just at a time when the financial stability of the program is being threatened by demographic, economic, and political upheavals,” noted Chris Orestis, president of Retirement Genius, a financial planning firm.

More than one problem

Being seven years away from the Social Security Trust Fund running short of money is the headline, but it isn’t the only problem facing the program. Here are five additional concerns facing the program going forward: • Revenue vs. benefits imbalance. Payroll tax income is no longer sufficient

to cover full benefits because of demographic shifts and slower wage growth. The projected actuarial deficit over the 75-year long-range period is 3.82% of taxable payroll, the Social Security Administration reported in June, higher than the 3.50% projected in the 2024 report. • Aging population pressure. As baby boomers continue retiring, the worker-to-beneficiary ratio keeps shrinking, adding stress to the system’s finances. • COLA and inflation volatility. Cost-ofliving adjustments have been fluctuating sharply with inflation, making planning difficult for retirees and the SSA. • Equity and fairness concerns. Policymakers face pressure to balance sustainability with fairness for low-income workers, women and minorities. • Integration with Medicare costs. Rising health care and Medicare costs indirectly strain Social Security finances and retirees’ purchasing power.

December 2025/January 2026 » InsuranceNewsNet Magazine

COVER STORY SOCIAL SECURITY AT A CROSSROADS

The problem is that the aging population keeps growing and living longer while the number of available workers paying into the system is not keeping up. “It takes at least three workers to help sustain one person collecting Social Security,” Orestis said. “The problem is that the aging population keeps growing and living longer while the number of available workers paying into the system is not keeping up.”

‘A combination’ of fixes

Whether it happens next year or not, Congress will eventually have to address Social Security. What might the “solution” look like? Johnson has some ideas. Several options are available, he said, and “will likely be a combination” of the following: 1. Raising the retirement age — the change would be phased in and wouldn’t likely affect those 62 and above approaching retirement. 2. Increasing the ceiling on the Social Security payroll tax — the current ceiling is $176,100. 3. Increase the number of working years used to calculate Social Security’s average indexed monthly earnings. 4. Tax all Social Security benefits of high earners. 5. Increase the payroll tax as a percentage. Some of these options are politically distasteful for lawmakers on both sides, Johnson noted. While Republicans are loath to implement any tax-increase ideas, Democrats are generally united in their opposition to cutting benefits, raising the retirement age or privatizing the program by diverting funds to private accounts. The Trump administration is not waiting for legislators to act on the disability benefits administered by The Social 14

Security program. According to the Wall Street Journal, the administration is looking to cut disability benefits by removing age as a factor for eligibility or raising the threshold from 50 to 60. According to the nonpartisan research institute Center on Budget and Policy Priorities, the Trump administration effort could reduce the share of applicants who qualify for Social Security disability income by 20%.

Advice to clients

Social Security remains a key retirement pillar for the large majority of Americans. While the deadline for action to save the program gets closer, advisors are not quite ready to recommend any long-range planning deviations. The earliest age Social Security can be claimed is 62. Approximately 23% of men and 24.5% of women claim Social Security benefits as soon as they are eligible, the SSA reported, a figure that has been declining for several years. Orestis fears that trend could reverse if enough Americans lose confidence in the long-term solvency of Social Security. It is generally a mistake to claim benefits early, he explained. “People who elect to take their Social Security benefit at 62 are locking in the lowest monthly benefit they are entitled to for the rest of their lives, and many are driven by fear,” he said. “If a person were to wait until the age of 70 to start collecting benefits, they would be collecting almost twice as much compared to starting at 62.” InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on X @INNJohnH.

InsuranceNewsNet Magazine » December 2025/January 2026

InsuranceNewsNet’s

2026 People to Watch special section highlights today’s brightest industry leaders.

INSIDE How Bestow Helped a Top-10 Carrier Grow Final Expense Sales 200% Year-Over-Year with Cindy De Armond, Chief Revenue Officer, Bestow PAGE 15 Leading the Way: Simplicity’s Playbook for Success with Bruce Donaldson, CEO, Simplicity Group PAGE 16 Pacific Life’s Bold Underwriting Innovation Raises the Bar for Life Insurers with Susan Ghalili, Chief Underwriter, Pacific Life PAGE 18

2026 People To Watch • Special Sponsored Section

How Bestow Helped a Top-10 Carrier Grow Final Expense Sales 200% Year-Over-Year by Cindy De Armond Bestow’s newly appointed Chief Revenue Officer

hen a major carrier approached Bestow about transforming their final expense business, they expected efficiencies and a modest increase in policy sales. What happened within the first year exceeded all expectations. By replacing fragmented systems with a unified intelligent platform, bound policies increased a whopping 200%. The secret wasn’t just going digital, of course; it was delivering an end-to-end experience so fast and frictionless that agents actually wanted to use it. In an industry where new technology typically faces adoption resistance, 61% of agents at one distributor sold through Bestow’s platform within three months, with 76% returning to sell more.

The Challenge: Digital Transformation That Agents Will Actually Use

The carrier wanted to capture more market share but faced a common problem: for agents, time is money, and most digital tools require training, create friction, or introduce delays that kill momentum. They needed to go from paper applications often taking days or weeks to instant, 100% online decisions without sacrificing underwriting quality. They also needed distribution technology that agents would embrace, not simply be forced to tolerate. Oh, and the market for final expense was only growing. The longer they waited, the more market share competitors could capture.

Previous attempts with disconnected point solutions hadn’t resulted in the desired efficiencies, cost savings, or adoption rates. Quote engines didn’t talk to eApps. Underwriting decisions required manual handoffs. Enter Bestow.

The Bestow Solution: Intelligence-First, End-to-End Infrastructure

Rather than stitch together multiple vendors, the carrier partnered with Bestow, a cloud-native, digital first platform that extends to policy administration. Bestow’s development process was agent-obsessed. Weekly demos with field agents and stakeholders identified friction points before they became blockers. The question at every stage: what makes this faster and easier for agents to sell? To achieve 100% instant decision rate, Bestow’s underwriting engine delivered a sophisticated risk assessment in under two minutes, with no applications sent to manual review. This all-digital approach meant agents could close sales on the spot. Bestow’s broader underwriting capabilities extend well beyond instant decisions. The platform features multipath underwriting that dynamically routes applications based on risk appetite, with complex cases flowing to human underwriters. Bestow’s strategy varies across partners and products, like IUL and term. But for this particular product and

market segment, instant decisions for 100% of applicants delivered customers and agents eager to gain coverage. Seven months later, the product launched with capabilities competitors often take years to build:

• 11-minute median application time (start to submit), compared to hours or days with paper

• 100% instant underwriting decisions in under two minutes • Zero phone interviews or follow-up questions. Everything completed on the spot

• Intuitive UX that new agents could learn in one or two tries Self-built solutions can take 18 months or more. With Bestow’s cloud-native platform, the carrier tapped into pre-configured products, deeply integrated data sources, and provider connections to seize a market opportunity in record time.

The Results: Adoption and Growth at Scale

Within three months: 61% of agents at one major distributor had sold a policy through Bestow’s platform. 76% came back to sell more, unheard-of retention for new insurance technology. The business impact: 200% YoY growth. The carrier launched in under a year, instead of the typical 18-24 months. They could see real-time data on what was converting and where distribution was expanding. When they wanted to iterate or launch adjacent products, Bestow’s infrastructure was already built to handle changes easily, often in just a few days. The alternative (building in-house or integrating 5-8 point solutions) would have taken years longer and cost multiples more.

Why Bestow’s Approach Is Winning With Major Carriers

With a successful final expense product in the market, supported by Bestow’s technology, the carrier’s in-house teams were free to maintain and improve existing systems, focus underwriting talent on complicated product applications, and plan for more ambitious future product development into emerging markets. Top carriers are increasingly choosing Bestow’s unified SaaS platform over the patchwork approach. What gives Bestow an edge? The company originally built its platform for direct-to-consumer insurance, learning firsthand what actually converts and what creates friction, eventually recognizing their technology had the power to transform the entire industry. The result: consumer-grade experiences that agents actually want to use, intelligent underwriting that adapts to each carrier’s strategy, and speed to market that point solutions simply can’t match.

Find out more!

For more information, email enterprise@Bestow.com.

December 2025/January 2026 » InsuranceNewsNet Magazine

2026 People To Watch • Special Sponsored Section

Leading the Way: Simplicity’s Playbook for Success

hen Bruce Donaldson talks about the future of financial services, he doesn’t sound like a CEO pitching a product. He sounds like a strategist rethinking how advisors and clients connect. As a partner and CEO of Simplicity Group, Donaldson believes the industry is at a defining moment that demands bold ideas, smarter tools, and a renewed focus on the people at the heart of it all. “Advisors today are being asked to do more than ever before,” Donaldson says. “They’re expected to deliver holistic financial strategies, keep up with compliance, and meet clients where they are, whether that’s face-to-face or through digital tools. The real challenge is giving them the resources to thrive without losing the personal connection that makes this industry so powerful.” This understanding has helped shape Donaldson Simplicity into one of the fastest-growing financial product distribution companies in the nation and a thought leader at the intersection of insurance, annuities, and wealth management.

An Industry in Transition

The financial services landscape has always been competitive, but in recent years, that competition has only become more intense. Market volatility, regulatory changes, rising client expectations, and rapid technology adoption have all pressured advisors to evolve. Many organizations respond with technology for technology’s sake, flooding advisors with dashboards, apps, and portals that often complicate rather than simplify work. Donaldson believes this technology race misses the point. “Tools are only as good as the strategy behind them,” Donaldson explains. “If you don’t have a system that integrates technology with education, product design, and marketing support, you’re not solving advisors’ problems. You’re adding to them.” Simplicity takes a different approach by streamlining the advisor experience and giving advisors the tools and support to focus on what matters most: serving clients efficiently and confidently. Simplicity has perfected the delivery with its new Agent Center on which all business appears in real-time.

Simplicity’s Approach: Elevating the Advisor

Donaldson’s leadership style is rooted in a clear ethos: empower advisors to spend more time with clients and less time wrestling with fragmented systems. “We’re obsessed with creating a culture where advisors feel supported and

InsuranceNewsNet Magazine » December 2025/January 2026

understood,” he says. “Our mission is to take the noise out of their day so they can focus on building meaningful relationships with their clients.” This philosophy is reflected in everything Simplicity does: from product design to marketing, training, and hands-on support. Advisors gain access to:

» Integrated technology platforms con-

solidating marketing, compliance, and product access in a single hub

» Training programs to keep advisors

ahead of industry shifts and deepen expertise

» Marketing resources helping advisors

stand out and connect with the right clients at the right time

» Product innovation balancing client protection with growth opportunities, especially in fixed indexed annuities and life insurance

The result is a seamless ecosystem where advisors thrive in a rapidly changing landscape.

Technology Meets Distribution

What sets Simplicity apart is the combination of a robust tech platform, one standard operating model and the largest distribution network in the industry. ”We have partnered with forward-thinking carriers to deliver everything their agents want through our agent center because it’s in the carrier’s best interest as well as the agent’s and consumer’s,” Donaldson explains.

“If you don’t have a system that integrates technology with education, product design, and marketing support, you’re not solving advisors’ problems. You’re adding to them.”

2026 People To Watch • Special Sponsored Section

This dual advantage has delivered measurable results. Fully-underwritten life insurance policies now average 31 days, down from 45, and annuities are processed in 21 days, down from 30. Simplicity is targeting turnaround times under 10 days. Through Simplicity’s Agent Center, advisors can view their entire book of business, submit applications, and TM Simplicity LifeLink Transforms Way Lifeto Insurance instantly see which carriers are The most likely approve Is a Purchased, From Quoting to Application to Issue client. The system filters out ineligible carriers, generates pricing sheets, and pushes applications directly to the right destination. “That’s where the industry has Save timeto andgo,” effort Donaldson in placing cases says. “Traditionally, you’ve seen insurtech initiatives or distribu Impress clients with the ease and convenience tion initiatives trying to improve the process but not sucof working in today’s digital world ceed. What makes Simplicity different is that we are both: Research get product details all in one a technology platform coupled withanddistribution. Someone has to be first, and we are.” convenient spot

With this pioneering model, Simplicity is creating a roadmap for the entire Join industry. “We want entire industry to the thousands ofthe advisors raise the level of production,” Donaldson using our technology toolssays. today.“Investing in the marriage of tech and distribution benefits consum©2025 Simplicity Group. All Rights Reserved. FOR FINANCIAL PROFESSIONAL USE ONLY. SWG3756670-0525 ers, advisors, carriers and distributors.”

Simplicity’s Differentiators: More than a Distributor

In a crowded field of distribution partners, Simplicity stands out with three core differentiators: 1. Breadth of Solutions – Advisors gain access to a wide range of products across insurance, annuities, and wealth management. One platform covers it all. 2. Integrated Technology – The digital ecosystem saves time and improves client experiences. “Our goal isn’t to overwhelm advisors with tech,” Donaldson says. “It’s to give them tools that actually make their lives easier.” 3. Advisor-Centered Culture – Everything is filtered through the question: Does this make an advisor’s life easier and their practice stronger? Many leaders have advisory or distribution backgrounds, shaping every decision.

“All of our partners own the same Class A equity,” Donaldson says. “No preferred shares, no mezzanine. Everyone rises and falls together.” Moving forward, Simplicity will make the equity opportunity available to both new employees and agents that are aligned with Simplicity. “We want everyone to benefit from our unique platform because everyone wants regular liquidity, and we are the only one to consistently deliver it,” said Donaldson.

Building for Advisors, Not Around Them

Donaldson emphasizes that the company’s true customers are the independent advisors who sit across from families making life-changing financial decisions. “We’re not here to impress Wall Street or chase trends,” he says. “We’re here for the advisor and the client. Technology should enable human connection, not replace it.” This commitment extends beyond digital tools. Advisors have access to real people who provide case design help, answer questions, and collaborate on complex planning scenarios. By blending human support with innovative technology, Simplicity gives advisors the clarity and confidence to serve clients effectively. With programs like advanced sales training and lead-generation support, advisors gain tools to grow their practices in the short term while building long-term value. “We don’t just want to help advisors write their next policy,” Donaldson says. “We want to help them create their own sustainable businesses that serves clients for generations.”

Looking Ahead: A Vision for Sustainable Growth

As Simplicity continues to scale, Donaldson insists that the advisor-first focus will remain central. “Our vision is simple: we want to be the most trusted partner for advisors in the industry,” he says. “That means continuing to invest in tools, training, and people who help advisors deliver for their clients. If we stay focused on that, everything else will follow.” By shortening application times, creating an integrated platform, and leading the charge in distribution and technology innovation, Simplicity is redefining what leadership looks like in the financial services industry. “We’re setting the pace for the entire industry,” Donaldson adds. “Other platforms will follow, and that raises the standard for everyone.” With a bold vision, measurable results, and a roadmap for the entire industry, Simplicity is not just participating in the future of financial services, it’s leading it.

Easier Life, Stronger Practice

To learn more, visit www.SimplicityGroup.com.

A Proven Equity Model, with Liquidity

Another differentiator is Simplicity’s unique equity model. In late 2024, the company completed its second recapitalization, providing liquidity back to shareholders and validating its growth strategy. In just four years, Simplicity delivered a 4x return to all shareholders.

December 2025/January 2026 » InsuranceNewsNet Magazine

2026 People To Watch • Special Sponsored Section

Pacific Life’s Bold Underwriting Innovation Raises the Bar for Life Insurers

n the life insurance business, every underwriting decision is a promise. It’s a commitment that one day, often decades in the future, a family or business will receive the benefit they were counting on. Few understand that responsibility better than Susan Ghalili, Chief Underwriter at Pacific Life, who has spent more than four decades shaping how the industry evaluates, prices, and delivers life insurance. “Every time an underwriter makes a decision to accept a case, they are making a commitment on behalf of the company to deliver on that promise in the future,” Ghalili said. “That’s why underwriting is not just a back-office function. It’s at the very heart of what we do.” For Pacific Life, underwriting has become a critical differentiator for financial professionals and their clients. By rethinking processes, investing in expertise, and strengthening relationships with financial professionals and reinsurGhalili ers, the company has positioned itself as a leader in risk assessment at a time when the business of life insurance is evolving rapidly.

Underwriting as a Market Differentiator

In many industries, customer loyalty comes down to brand perception or price. In life insurance, underwriting often determines where the business goes. “Underwriting is truly the key differentiator and decider of where our clients and financial professionals decide to place business” Ghalili explained. “It’s not just about pricing the risk. It’s about how accessible, transparent, and capable we are in handling complex cases.” That’s especially relevant in the large-case market, where coverage can exceed $50 million or even $100 million. To serve that segment, carriers must not only have the underwriting expertise to evaluate complex medical and financial profiles but also the capacity to place such large amounts of coverage. This year, Pacific Life became the first U.S. carrier in decades to expand its individual capacity — the maximum amount of coverage we are able to offer on a single life. Working in partnership with reinsurers, Pacific Life raised its auto capacity from $65 million to $75 million, breaking through a ceiling that had stood for nearly 30 years. “That announcement was significant because it made us the destination company for financial professionals working with family offices and ultra-affluent individuals,” Ghalili said. “We know others will follow, and that’s

InsuranceNewsNet Magazine » December 2025/January 2026

a good thing. When one company leads, it helps move the entire industry forward.”

Expertise, Transparency, and Access

At the core of Pacific Life’s approach is the human element: highly experienced underwriters who not only understand complex cases but also remain accessible to financial professionals. “Access to the underwriter is a key differentiator for us,” Ghalili said. “Financial professionals want a conversation if they don’t understand a decision. They want options and strategies. We’re not hidden behind closed doors.” That philosophy is built on both technical expertise and client service. Pacific Life underwriters regularly review sophisticated medical records and financial statements, and they work closely with reinsurers to ensure that pricing and risk sharing are aligned. At the same time, they provide transparency to financial professionals without compromising confidentiality, giving them the tools to explain outcomes to their clients.

“Access to the underwriter is a key differentiator for us. Financial professionals want a conversation if they don’t understand a decision. They want options and strategies. We’re not hidden behind closed doors.” “Ease of doing business is critical,” Ghalili said. “It’s not just about the decision we make but about how clear and efficient the process is.”

2026 People To Watch • Special Sponsored Section

Innovation in Practice

Pacific Life’s underwriting innovations aren’t just about efficiency — they’re about creating a better experience for financial professionals and their clients. By taking a “concierge” approach to underwriting, clients no longer face the frustration of duplicative medical exams. Instead, Pacific Life, with client authorization, leverages records from the client’s existing physicians. For financial professionals, that means fewer barriers to closing large, complex cases and a smoother path to coverage. For clients, it preserves the premium, white glove experience they expect.

“It’s about looking at the risk holistically rather than just checking boxes,” Ghalili said. “Healthy practices matter, and we want to reflect that in our underwriting.” Unlike other carriers experimenting with wellness incentives, Pacific Life has extended Healthy Rewards across its full product portfolio.

Supporting Financial Professionals

Ultimately, underwriting succeeds when financial professionals can confidently guide their clients. That requires ongoing education and communication.

“We want to make sure financial professionals fully understand our practices, requirements, and processes so they can deliver the best outcomes.” “Concierge underwriting allows us to honor the client’s time and the relationship the financial professional has built,” Ghalili said. “It’s about making the process feel seamless while maintaining the rigor underwriting requires.” Pacific Life’s Automated Underwriting has also been a game changer. By using self-reported histories and electronic databases, applicants can secure up to $3 million in coverage without invasive exams. “We’ve seen a success rate of more than 40% among eligible clients,” Ghalili said. “It’s about making life insurance more accessible while maintaining discipline around risk.” Pacific Life has also expanded underwriting guidelines for foreign nationals, offering coverage to individuals with financial and physical ties to the U.S. This progressive approach, developed in consultation with reinsurers and compliance teams, has expanded Pacific Life’s competitive edge in this growing market while setting an example for peers.

The Role of Reinsurers

Reinsurers play a pivotal role in underwriting capacity and credibility. Carriers rely on them to share risk, but reinsurers must trust the carrier’s underwriting discipline. “In order for reinsurers to agree to take part of the risk, they have to have confidence in our practices and standards,” Ghalili said. That credibility enabled Pacific Life to secure reinsurer support for the industry-changing increase in auto capacity and jumbo limits. “What’s good for us is good for the reinsurers. What’s bad for us is bad for them,” Ghalili explained. “We’re in it together.”

A Holistic View of Risk

Pacific Life has also taken a holistic approach through its Pacific Healthy Rewards program, which considers not just medical conditions but how clients manage them. For example, two individuals may have diabetes, but one who follows treatment and maintains a healthy lifestyle may receive better pricing.

“We want to make sure financial professionals fully understand our practices, requirements, and processes so they can deliver the best outcomes,” Ghalili said. Pacific Life wholesalers, who maintain close relationships with financial professionals, play a central role in that effort. They serve as quarterbacks, bridging communication between financial professionals and underwriters to ensure cases move smoothly. “No organization can be successful just by having strong underwriting,” Ghalili said. “It takes strong distribution, strong products, and strong underwriting working together.”

Always Moving Forward

Differentiation in underwriting, Ghalili notes, is never permanent. Competitors catch up, and clients’ expectations continue to rise. “In any market, your differentiation is short-lived,” she said. “You have to continuously move forward.” For Pacific Life, that means pushing the boundaries of underwriting capacity, simplifying processes, and finding new ways to balance risk with client experience. Underwriting may be invisible to most policyholders, but as Ghalili makes clear, it is where promises are made and trust is built. “It’s always about striking that balance — pricing the risk appropriately while making it easier for people to get access to life insurance,” Ghalili said. “That’s what makes underwriting such a powerful differentiator.”

See How We Can Help For more information, financial professionals are invited to scan the code.

December 2025/January 2026 » InsuranceNewsNet Magazine

the Fıeld A Visit With Agents of Change

InsuranceNewsNet Magazine » December 2025/January 2026

PLANNING IN THE KEY OF LIFE — WITH PRESTON CHERRY IN THE FIELD

Preston Cherry specializes in helping members of Generation X live their best financial lives while he teaches the next generation of professionals.

holisticness of self and finally we have an actual financial psychology. So we’re talking about financial psychology and financial therapy and money mindset — and all of this is inside of planning.”

compensation. We knew their employee benefits and their executive compensation plans forwards and backwards because we specialized in those companies,” he said.

By Susan Rupe

Struggle and celebration

Cherry said the groundwork of his interest in financial planning was built during money talks with his parents and family as a child. “We always had some money talks in the home. It was either about a struggle or we were celebrating something like a life event. But it always was tied to money in some way.” As an undergraduate student at Prairie View University in Texas, Cherry took a personal finance class. The professor thought Cherry had a knack for the subject and recommended he pursue graduate studies in financial planning at Texas Tech.

Comprehensive vs. holistic planning

n September 1976, Stevie Wonder released the double album “Songs in the Key of Life.” The album became the second-highest selling album of 1977, eventually winning Album of the Year at the 19th Grammy Awards. Wonder recorded the album after he seriously considered leaving the music industry and moving to Ghana to devote the rest of his life to helping children with disabilities. But after planning his farewell tour, he changed his mind and signed what was then the biggest recording deal in history. The tracks in “Songs in the Key of Life” reflect the range of the human experience: love, joy, loss, birth, celebration, social justice and spirituality. That range of human experience also translates into financial planning, and the album inspired Preston Cherry in his practice. Cherry is the founder of Concurrent Wealth Management, creator of Financial Harmony and author of Wealth in the Key of Life: Finding Financial Harmony. He also is associate professor of finance and head of the financial planning program at the University of Wisconsin-Green Bay. The Financial Planning Association presented him with its 2025 Heart of Financial Planning Award. The origin of financial planning is life planning, Cherry said, and it was something he learned when he studied financial planning at Texas Tech University, a pioneer in the subject. “One of the books I studied there said the process of financial planning starts with learning the values and the identity and the person and the goals, and what people want to do with their lives now and in the future,” he said. “Holistic planning, comprehensive planning is covering all the areas, all the domains of planning. And then we have the

Cherry continues to serve oil and gas company clients from his virtual practice based in Houston while he teaches in Green Bay, where he lives. He is a champion of both comprehensive and holistic planning, which he said are two different things. “Comprehensive is the domain and then holistic is the sense of the person and their identity. It gets into how you think, how you feel, how you behave, your value system about money. “It starts drilling down underneath the financial psychology umbrella, which is

“Comprehensive is the domain and then holistic is the sense of the person and their identity. It gets into how you think, how you feel, how you behave, your value system about money.” Cherry began working as a bank teller while he attended Prairie View, and he eventually worked his way into the bank’s investment division, obtaining his Series 7 license along the way. After receiving his master’s degree from Texas Tech in 2006, Cherry went to work for a financial services firm that worked with oil and gas companies in Houston. “I was part of a team,” he said. “I was the junior financial planner at that time, and there was a lead financial planner. The lead planner was the rainmaker and the presenter, and the junior planners did all the data entry and built the plans.” The firm did comprehensive planning for their oil and gas company clients. “We covered everything — all the aspects of comprehensive financial planning, so it included personal insurance, liability, estate planning, equity

financial therapy, the financial psychology of financial planning and behavioral finance, which is about your investments in your decision making.” The client’s identity is underneath that umbrella, Cherry explained, and the advisor must ask questions to help them and the client define that identity. “What are your experiences? What is your culture? What are your values — your past, present and future about your relationship with money and how it pours into your thought process and your decisions and your why? Why do you want to do what you want to do? What is your sixyear plan? What fueled that?” Getting to the root of what a client needs and what is behind those needs requires difficult conversations, Cherry said. “Sometimes difficult can be a barrier. But it’s necessary. If you do not have the

December 2025/January 2026 » InsuranceNewsNet Magazine

the Fıeld A Visit With Agents of Change Money is part of any type of challenge we have, every type of celebratory moment, all of our decisions.

So money has a soul. necessary conversations, then you cannot have the necessary financial strategy that’s critical to carry out the life aspirations that you want.”

Teaching the next generation

Cherry is excited about teaching the next generation of financial professionals through his work at UWGB. “We need so many young people to come into this profession,” he said. “There are more folks over the age of 60 in this profession than there are under the age of 30. It’s up to us in Generation X to influence those under 30 to enter this profession. “The energy is high within my classroom. The curiosity is high and so are the energy and the willingness to want to adapt the industry to Generation Z and the millennials.” Cherry described young adults as wanting the “three C’s: clarity, connection and competency.” “They want to see clarity in fees. They want to have more connection and they want to have everything quicker and better than the generations before them had it. They also see competency a little differently. It’s not just about having the alphabet soup of designations after your name; it’s about 22

proving you’re a trusted individual. They want to get rid of the skepticism. And then they want everything done in a more streamlined manner, as far as technology is concerned.”

Serving the ‘forgotten generation’

Cherry works with many Generation X clients in his practice. As a Gen Xer himself, he recognizes many of the financial challenges faced by his peers. “Gen X is a special group. We were the latchkey kids; we were home alone after school because our parents had to work. We are overeducated and we are burned out. My Gen X friends are still taking care of their 25-year-old kids as well as taking care of their parents. Gen X is truly sandwiched but trying to live their best years.” Cherry jokes that Gen X is “the forgotten middle child” but added their unique financial situation means they need an advisor’s help in planning for a retirement that they fear they have fallen behind in saving for.

Inspired by music

Wealth in the Key of Life was published in December 2024. Cherry said he used Wonder’s album as the backdrop for the book because, just as Wonder used

InsuranceNewsNet Magazine » December 2025/January 2026

music to demonstrate all of life’s phases, money is also something that touches all aspects of life. “You often hear that money is a tool. It helps you do things. But I say a tool has no soul. Money touches every part of our lives — from the brand of toilet paper we choose to the water we drink, to the house we live in, to the services we buy for our families or ourselves. Money is part of any type of challenge we have, every type of celebratory moment, all of our decisions. So money has a soul. We exchange part of our soul when we go to work every day to make that currency exchange.” In his book, Cherry outlines his “Life Money Balance” approach that not only focuses on wealth accumulation but also emphasizes the importance of well-being in achieving a fulfilling life. The book includes his “Six-A Alignment System” that helps people understand and improve their relationship with money, and the Four T’s — a self-audit including trial, triumph, transition and transformation — that aids in integrating finances into your life. Cherry said the most important piece of financial advice he can give to anyone is to not compare their own situation with anyone else’s. “My dad used to tell a story and he said, ‘You know one thing about horses, they have blinders on for a reason. Those blinders keep them looking straight ahead so they won’t be looking left or right.’ “I share that story with clients all the time. I tell them the No. 1 rule about money is not to compare. Don’t compare. Give yourself grace and understanding. If you don’t understand yourself and you don’t have grace and understanding, you will quickly become unaligned. The key is aligning your life and your money on your own journey. If you don’t do that, none of the planning or financial strategies will work.” Susan Rupe is managing editor for I nsu ra n ce N ews N et . She formerly served as communications director for an insurance agents’ association and was an award-winning newspaper reporter and editor. Contact her at srupe@ insurancenewsnet.com.

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LIFEWIRES

Americans fall short on longevity planning

Americans are living longer, but a new study shows they are unprepared for those extra years. A first-of-its-kind Longevity Preparedness Index — developed jointly by John Hancock and the MIT AgeLab — reveals that U.S. adults score an average of 60 out of 100 in overall readiness for later life. The measure looks beyond finances to include eight interconnected domains of well-being: social connection, finance, daily activities, care, home, community, health and life transitions. The survey results show progress in social and community engagement, yet highlight continued shortfalls in planning for long-term care, housing and health. Key findings include women outperforming men in care (43 vs. 41), social connection (71 vs. 68), daily activities (61 vs. 59) and life transitions (62 vs. 60). Men score higher financially (65 vs. 63). This shows women’s strengths in social and emotional domains, while men have better financial readiness. Care preparedness was the lowest-scoring area, averaging 42. Many respondents have not discussed care plans with family or found future caregivers. Even caregivers often lack plans for their own needs.

Q U O TA B L E Life insurance is often far more affordable than younger adults think.” — Dan Kraft, vice president of product and innovation at Trustmark

The reason? According to J.D. Power, digital-first clients value convenience, transparency and quick access to service — areas where many traditional distribution models still lag. “Consumers increasingly expect insurance to work like their other digital services — fast, easy and personalized,” said Craig Martin, executive director of global insurance intelligence at J.D. Power. “The challenge for agents is to combine perMassMutual has more than $1 tril- sonal connection with the efficiency of lion in life insurance protection in force digital engagement.” and has paid more than $60 billion in insurance and annuity benefits over the past decade. Last year, it announced a dividend payment of $2.5 billion, the largest in MassMutual’s history.

MASSMUTUAL FACES SEC SCRUTINY

Regulators with the U.S. Securities and Exchange Commission are investigating accounting practices at MassMutual, The Wall Street Journal reported. The Journal said the SEC has focused on how MassMutual accounts for income earned on billions of dollars in loans. The probe has yet to be completed and may not result in any accusations of wrongdoing. The investigation focuses on accrued interest. The Journal said the SEC is looking at whether MassMutual properly reconciled accrued interest as it received payments on loans held in its general investment account. DID YOU

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PACIFIC LIFE PLANS EXPANSION AGENTS RISK LOSING CLIENTS TO DIRECT CHANNELS

J.D. Power data shows a striking gap between customers who buy policies directly from insurers and those who purchase through agents or advisors. Customers who buy directly — whether online, via a call center or through a mobile app — report satisfaction scores 57 points higher on average than those working with intermediaries (696 vs. 639).

Charlotte, N.C., will land more than 300 jobs as Pacific Life plans a $12 million expansion into that city. The insurance company’s expansion plan will create 301 jobs with an average $176,250 annual salary for new positions. For its Charlotte investment, Pacific Life will receive $5.5 million in state tax incentives over 12 years based on meeting incremental job creation and investment targets.

Excess mortality for Americans aged 65 or older dropped from more than 20% at the peak of the COVID-19 pandemic to only 1.3% in the past year. Source: Society of Actuaries Research Institute

InsuranceNewsNet Magazine » December 2025/January 2026

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Legal & General America life insurance products are underwritten and issued by Banner Life Insurance Company, Urbana, MD and William Penn Life Insurance Company of New York, Valley Stream, NY. Banner products are distributed in 49 states and in DC. William Penn products are available exclusively in New York; Banner Life is not authorized as an insurer and does not do business in New York. The Legal & General America companies are part of the worldwide Legal & General Group. OPTerm policy form # ICC21-DTCV and state variations. In New York, OPTerm policy form # DTCV21-NY. Premiums are guaranteed to stay level for the initial term period and increase annually thereafter. Premiums based on preferred plus non-tobacco, preferred non-tobacco, standard plus non-tobacco, standard non-tobacco, preferred tobacco and standard tobacco underwriting classes. Banner premiums quoted include $90 annual policy fee, William Penn premiums include $80 policy fee. Two-year contestability and suicide provisions apply. Policy descriptions provided here are not a statement of contract. Please refer to the policy forms for full disclosure of all benefits and limitations. CN10232025-7

LIFE

Life insurance can shield your estate State estate tax bills can threaten the inheritance of a home, family business or other assets. By David E. Appel and Aviva Sapers

lthough the “Big Beautiful Bill” raised the federal estate tax exemption to $15 million per person, state estate taxes have much lower exemptions in many states. Oregon is the lowest, with a $1 million exemption, and Connecticut is the highest, with a $13.99 million exemption. The top state estate tax rates range from a low of 12% in states such as Maine and Connecticut to a high of 20% in Washington state and Hawaii. In states such as Massachusetts, it is a bit of a double whammy with a low exemption of $2 million and a top tax rate of 16%. Therefore, the state estate tax should not be overlooked. For many families, a low threshold can lead to unexpected tax bills that threaten the inheritance of a home, a family business or other valuable assets. Although there are estate planning strategies to minimize the burden of this tax, one of the most effective tools used to pay this tax is often overlooked: life insurance. Let’s explore how estate taxes work and why life insurance can play a crucial role in helping families manage the financial challenges of settling an estate. As mentioned previously, Massachusetts imposes an estate tax on estates that exceed a certain threshold. As of a 2025 update, the threshold is $2 million for individuals. This means that if a deceased person’s estate is under these thresholds, no state estate tax is due. The low threshold disproportionately affects middle-to-high-income families who may not have “traditional” wealth but own a home or small business valued at more than $2 million. In order to explain how state estate taxes 26

are applied, we took the Massachusetts estate tax as an example. The estate tax rates in Massachusetts, like many other states, are progressive, based on the value of the estate. Estates valued at more than $2 million are subject to marginal estate tax rates between 7.2% and 16%.

Massachusetts estate tax rates in 2025

To calculate the estate tax: 1. Determine the gross estate worth (real estate, investments, retirement accounts, business interests, etc.). 2. Apply allowable deductions (debts, funeral expenses, administrative costs). 3. If the net estate exceeds the $2 million individual threshold, consult the estate tax table. Most people should have an accountant or estate planning lawyer prepare the estate tax returns and calculate the tax due. Some issues to consider regarding assets include: » Families must get appraisals for real estate, collectibles and business interests to accurately value the estate. » Real estate often makes up a significant portion of a decedent’s estate. The tax burden can force heirs to sell property quickly at an inopportune time just to pay taxes. » Massachusetts property values can fluctuate, and estates with substantial real estate holdings could face varying estate tax bills. Clients should plan for higher values. » The estate is taxed based on fair market value, which may cause disputes or confusion if assets are not properly appraised and some family members want to retain them. » If the estate includes a family business, heirs may face the difficult decision of selling the business to cover the tax bill. » Estate taxes can create roadblocks to smooth business succession, potentially affecting job security and the legacy

InsuranceNewsNet Magazine » December 2025/January 2026

of a family business when not planned for in advance. Without sufficient cash, when a loved one dies, heirs may face the responsibility of paying estate taxes out of pocket. This can have a severe impact. For many families, liquidating assets — such as selling a home or business — may be necessary to cover these taxes. This is where life insurance can be used to help with these issues. The resulting stress can cause emotional strain on grieving families, in addition to the financial burden. Homes and family-run businesses are often the largest assets in an estate. If they are worth a decent amount, the estate tax bill can be large. Heirs may have no choice but to sell these assets to meet tax obligations. This can possibly disrupt family legacy or livelihood. In addition, estate taxes are due nine months after the date of death, which could force the sale of some of these assets in a hurry in order to pay the tax. Interest and penalties accrue for late payments, adding to the financial stress.

Example: Married couple with $10 million estate

Let’s assume a married couple has a $10 million estate and uses basic estate planning to split their exemptions (i.e., each spouse can use their $2 million state exclusion, for a total of $4 million). Here’s how their state estate tax might look: Step 1: Net taxable estate » Gross estate: $10,000,000 » Less couple’s exemption: $4,000,000 » Taxable estate: $6,000,000 Step 2: Estimate tax using the Massachusetts estate tax table For a $10 million estate, the Massachusetts estate tax liability is roughly $1,000,000 (exact amount depends on the table and deductions). This tax is due within nine months of death and must be paid in cash. A

LIFE INSURANCE CAN SHIELD YOUR ESTATE LIFE six-month extension is available, but this only extends the filing deadline, not the payment deadline. Late payments or late filings incur interest and penalties, which can further increase the financial burden on the family.

Where might life insurance fit in?

» Life insurance as a tax-offset strategy: One of the most effective tools for covering estate taxes is life insurance. A life insurance policy can provide heirs with the liquid cash necessary to pay the estate tax without having to sell valuable assets. » Individual or survivorship life insurance policies: Whole life, universal life, indexed universal life and other permanent life insurance policies can be especially useful in estate planning. The death benefit from these policies is typically paid income-tax-free to the beneficiaries, making it a reliable source of funds when estate taxes are due. » Policy ownership structure: Life insurance is includable in the taxable estate. By owning the life insurance policy in an irrevocable life insurance trust, the death benefit can be excluded from the decedent’s estate, ensuring it won’t be subject to additional estate taxes.

Benefits of using life insurance for estate tax planning

» Avoiding a fire sale of assets: With life insurance, heirs can avoid selling family homes or businesses to pay estate taxes, thus preserving family wealth and legacy. » Guaranteed funds: Life insurance provides a guaranteed death benefit, meaning the beneficiaries know exactly how much will be available to cover estate taxes. This eliminates the uncertainty of whether there will be enough liquid assets. » Cost-effective in the long run: Life insurance premiums are generally affordable and can be structured to fit an individual’s financial situation. By setting up a policy early in life, individuals can lock in lower premiums and ensure their family is financially protected when they pass away. » Immediate liquidity: Death benefits are paid quickly, allowing heirs to pay taxes when due without selling assets.

2025 state estate tax and inheritance tax The information regarding the state estate and inheritance taxes for 2025 is sourced from the 2025 State Estate Tax and Inheritance Tax Chart by Partners Financial. This source provides details about state-specific exemptions, tax rates, and other pertinent notes relevant to estate and inheritance taxes in the United States. For 2025, estate and inheritance taxes in the United States vary significantly by state. Here’s a summary from key states: Connecticut

Estate tax with a top rate of 12% and an exemption of $13,990,000

District of Columbia

Estate tax with a top rate of 16% and an exemption of $4,873,200

Hawaii

Estate tax with a top rate of 20% and an exemption of $5,490,000

Illinois

Estate tax with a top rate of 16% and an exemption of $4,000,000

Kentucky

Inheritance tax with a top rate of 16%

Maine

Estate tax with a top rate of 12% and an exemption of $7,000,000

Maryland

Estate tax with a top rate of 16% and an exemption of $5,000,000

Massachusetts

Estate tax with a top rate of 16% and an exemption of $2,000,000

Minnesota

Estate tax with a top rate of 16% and an exemption of $3,000,000

New York

Estate tax with a top rate of 16% and an exemption of $7,160,000

Oregon

Estate tax with a top rate of 16% and an exemption of $1,000,000

Rhode Island

Estate tax with a top rate of 16% and an exemption of $1,802,431

Washington

Estate tax with a top rate of 20% and an exemption of $2,193,000

Each state has its own unique rules and some, such as New York, have “cliff taxes” where exceeding the exemption limit can result in the loss of the exemption entirely. Additionally, states such as Iowa have eliminated their inheritance tax as of 2025, while others have varying inheritance tax rates for relatives and non-relatives. For detailed specifics per state and additional exemptions, you can scan the code to view the full 2025 State Estate Tax and Inheritance Tax Chart.

» Cash when needed: Avoids the forced sale of legacy properties or businesses. » Wealth preservation: Keeps the estate intact for heirs. » Tax-advantaged status: Death benefits are income-tax-free, and if structured properly, outside of the estate, using an ILIT. We used Massachusetts as an example because with the relatively low estate tax thresholds, even modestly wealthy couples are at risk of a large tax bill. States such as Rhode Island, Minnesota, Illinois, Oregon and Washington all have fairly low exemptions and have similar effects. Planning with tools such as life

insurance and trusts can preserve wealth and ease the burden on heirs. David E. Appel, CLU, ChFC, AEP, is managing partner at Appel Insurance Advisors, Newton, Mass. Contact him at david.appel@ innfeedback.com. Aviva Sapers, CLU, ChFC, is the CEO of Sapers & Wallack, a third-generation insurance, benefits and investment management firm in Newton, Mass. Contact her at aviva. sapers@innfeedback.com.

December 2025/January 2026 » InsuranceNewsNet Magazine

ANNUITYWIRES

2025 Annuity Sales (through 9 months)

Total Variable $104.2 billion up 15%

Q3 annuity sales shatter more records

Total Fixed $240.9 billion down 1%

Total Sales

$345 billion up 4%

Source: LIMRA

Annuities just keep setting new record sales figures. Sales increased 4% to $119.3 billion in the third quarter, LIMRA reported, marking the eighth consecutive quarter of $100+ billion in sales. Year-to-date annuity sales totaled $345 billion, up 4% year over year. This is the highest total ever recorded in a nine-month period, according to preliminary results from LIMRA’s U.S. Individual Annuity Sales Survey, which represents 89% of the total U.S. annuity market. Registered index-linked annuity sales were $20.6 billion, 20% higher than the prior year and 10 times the sales recorded a decade ago for the product line. In the first three quarters of 2025, RILA sales increased 18% year over year to $57.3 billion. Total fixed-rate deferred annuity sales were $41.7 billion in the quarter, 3% higher than third-quarter 2024 sales. Fixed indexed annuity sales fell 6% year over year to $33.2 billion.

MILLIMAN: CERTAIN VA SURRENDERS DOUBLE

Milliman research finds that surrender rates on variable annuities with guaranteed living withdrawal benefits more than doubled from 2022 to the end of 2024. An actuarial and consulting firm, Milliman has two ongoing Variable Annuity Industry Experience Studies analyzing policyholder behavior across 23 companies over a span of 17 years. The studies also revealed that the rate at which GLWB contracts are starting their income during the 2023 and 2024 calendar years is, on average, about 20% higher than in the previous two-year period. The studies cover surrender behavior and partial withdrawals, focusing on income utilization for GLWB riders. Study results reveal that average surrender rates have increased since 2022 for GLWB contracts and contracts DID YOU

KNOW

without living benefits. Notably, surrender rates have increased even during periods when surrender charges apply, contrary to traditional expectations. Additionally, GLWB contracts that are at the money or moderately in the money have experienced higher surrender rates than previously observed. These patterns likely reflect policyholders’ responses to higher interest rates and the growing appeal of alternative annuity product offerings, Milliman said.

FAMILY OF DEMENTIA VICTIM WHO JUMPED TO HIS DEATH SETTLES LAWSUIT OVER ANNUITY SALES

The widow of a New York City man who jumped to his death settled a lawsuit with the insurance companies and a broker who sold him annuities. Joan Jacobson, Jay Jacobson’s widow, claimed that the defendants sold her husband $2 million worth of annuities from 2019 and 2023, with no death benefits. Jacobson, 84, suffered from dementia, his family said, and died by suicide July 27, 2024, after jumping from

Q U O TA B L E LIMRA is projecting annuity sales to surpass $450 billion in 2025.” — Bryan Hodgens, senior vice president and head of LIMRA research

a penthouse apartment at the Anagram Columbus Circle at 1 West 60th Street. According to an order filed with the Supreme Court of the State of New York, the parties settled the case in late October. No further details were released. The lawsuit named USAA Life Insurance Co., New York Life Insurance and Annuity, Fidelity Insurance Agency, Massachusetts Mutual Life and broker Michael Bryce Venable as defendants.

AMERILIFE PARTNERS WITH LEVINSON & ASSOCIATES ON LIFE, ANNUITY SALES

AmeriLife Group announced a strategic partnership with Levinson & Associates, an insurance marketing organization specializing in life insurance and annuity products.

Bill and Cary Levinson

This partnership “brings together two industry leaders committed to empowering agents and agencies with innovative tools, resources, and support to drive growth and deliver exceptional client experiences,” AmeriLife said in a news release. Founded in Coral Springs, Fla., in 1972, Levinson & Associates has 23,000 agents nationwide, offering a comprehensive portfolio of products including simplified issue life, universal and whole life, annuities, and survivorship solutions, the release said.

Two-thirds of non-retired respondents — including 71% in Mexico, 66% in the U.S. and 55% in Japan — say they prefer guaranteed monthly income over a lump sum. Source: 2025 Global Retirement Pulse Survey by Prudential Financial

InsuranceNewsNet Magazine » December 2025/January 2026

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ANNUITY

The idea that age automatically disqualifies someone from considering an annuity is one of the most common myths.

Why age alone shouldn’t rule out annuities in retirement It’s essential to weigh the timing and type of product carefully when discussing annuities with your retired clients. By David Paul

etirement today looks very different from what it did even one generation ago. Longer lifespans, unpredictable markets and rising costs for essentials such as health care have forced many retirees to reconsider how they generate income. That is why annuities, once considered niche products, have become mainstream. In 2024, annuity sales reached $432 billion, underscoring the demand for guaranteed income in uncertain times. The idea that age automatically disqualifies someone from considering an annuity is one of the most common myths. There is no federal law that sets an age cap. This leaves insurers to establish 30

their own guidelines, often capping immediate annuity sales between ages 80 and 85. However buyers in their 70s and even early 80s still have access to a wide range of products. Some companies extend eligibility into the 90s, especially for certain deferred or variable annuities. Pricing does change with age. Because their life expectancy is shorter, older buyers generally receive higher monthly payments. This can make an annuity appealing to someone in good health with a history of longevity in their family. The trade-off is fewer years to receive payments, which makes it essential to weigh the timing and type of product carefully when discussing annuities with your retired clients.

Why annuities matter for today’s retirees

Life expectancy continues to climb, with men at age 65 expected to live an additional 18 years and women closer to 21 more years. That means retirees in their 70s

InsuranceNewsNet Magazine » December 2025/January 2026

often still face a decade or more of financial needs to cover. Meanwhile, the average Social Security benefit sits around $1,976 a month in 2025. That amount rarely stretches far enough to handle both dayto-day living and unexpected expenses. For many retirees, especially those without a pension, annuities serve as a way to close the gap. Social Security was never intended to cover all retirement costs, and although it provides stability, it often leaves shortfalls. Adding an annuity can diversify income streams, reduce reliance on market performance and provide peace of mind that money will not run out. This diversification becomes particularly valuable during periods of inflation. Fixed incomes lose purchasing power when costs rise, but annuities with inflation riders or variable growth features can help offset the risk. Although riders come with additional costs, the security they provide is worth considering for those concerned about maintaining their lifestyle.

WHY AGE ALONE SHOULDN’T RULE OUT ANNUITIES IN RETIREMENT ANNUITY

Trade-offs and timing considerations

Annuities aren’t flawless and may not be suitable for every retiree. The most common drawbacks include high fees, surrender charge and limited liquidity. For retirees in their 80s, these drawbacks weigh heavily because there’s less time to recover the up-front costs. In fact, many critics will caution that annuities may not make sense once someone is well into their 80s, unless they have needs. Liquidity is one of the most significant sticking points. Investing in an annuity typically means locking away your money for a specified period, which can be restrictive if unexpected emergencies arise. We often recommend having enough in cash or other liquid investments to cover at least several years of expenses before committing funds to an annuity. Health is another critical consideration. Although insurers may offer enhanced payouts to those with medical conditions, these rarely outweigh the risks associated with a shortened lifespan. In such cases, the up-front investment may not deliver enough value to justify the purchase.

Guidance for financial professionals

For financial professionals with retired clients interested in annuities, the challenge lies in cutting through the myths and guiding them toward solutions that truly meet their needs. This means treating each retiree as an individual, not a sales opportunity. Everyone has unique health factors, family circumstances and income goals. A 75-year-old in excellent health with a modest pension may benefit from a lifetime income annuity. At the same time, an 82-year-old with significant liquidity needs may be better served with a certificate of deposit ladder or bond portfolio. The service-first mindset is essential. Financial professionals who ask questions such as “What risk are you trying to solve?,” “How much flexibility do you need?” or “How do you want your assets to support your heirs?” create conversations that move beyond the mechanics of a contract. This approach ensures the product fits while building trust and longterm loyalty.

Perhaps the right question is not “Which annuity should I sell?” but rather “What problem am I solving for this person?” Alternatives worth considering

Annuities are one of several income tools available, but they’re not the only choice. For retirees who can’t commit funds to a contract, other strategies exist.

» CD ladders or bond portfolios that provide steady payouts while preserving liquidity.

» Reverse mortgages for homeowners

aged 62 and older who need supplemental cash flow.

Part-time or freelance work that allows retirees to delay withdrawals from savings and maximize Social Security benefits. These alternatives don’t offer the same level of lifetime guarantee as annuities, but they provide flexibility. A blended strategy in which a retiree secures a base level of guaranteed income and maintains some assets in more accessible forms often works best.

Putting the client first

The best retirement income strategies aren’t about products; they’re about people. Every retiree’s situation is different. Those of us who take the time to understand client goals — whether protecting a spouse, funding health care or leaving a legacy — will be best positioned to serve their needs. Perhaps the right question is not “Which annuity should I sell?” but rather “What problem am I solving for this person?”

That focus on service transforms the conversation. Instead of positioning annuities as a catch-all solution, we can demonstrate how the right product at the right time helps retirees live with more confidence and less financial stress.

Turning longevity into opportunity

Retirement is no longer a brief chapter in life. For many, it’s a 20-year or even 30-year journey. The fear of outliving savings is real, and Social Security alone is rarely enough to cover all costs in later years. Annuities, when chosen thoughtfully, can provide the income stability retirees crave. Age alone should not disqualify someone from considering these products. Insurers allow purchases well into the 80s, and the higher payouts available at older ages can make them appealing for healthy retirees. The key lies in aligning the decision with personal health, goals and financial circumstances. When we guide our clients with empathy and customized solutions, we can help retirees understand that the actual value of an annuity lies in the security it delivers. With careful planning, even those who think they’re “too old” for an annuity may find that the right product at the right moment can transform their retirement experience. David Paul is the vice president of life at AmeriLife. Contact him at david.paul@ innfeedback.com.

December 2025/January 2026 » InsuranceNewsNet Magazine

HEALTH/BENEFITSWIRES

LTCi makes a difference in family caregiving

Caregiving can be expensive and chaotic. Having long-term care insurance can make a difference in how families deal with caregiving. That was the main takeaway from a recent study from the Certification for Long-Term Care and UMass Boston’s LeadingAge LTSS Center. The study tracked four groups of families who are paying for in-home care, two with long-term care insurance and two without. The study found that family members who are caring for a loved one without LTCi faced early retirements, six-figure care costs and drained life savings. Insurance eased the financial hit but didn’t solve the day-to-day stress, especially when it came to finding and keeping reliable caregivers. Those whose loved ones had LTCi still had financial concerns, despite being able to tap into the policy’s benefits to pay for care. These family members faced large out-of-pocket costs, mainly resulting from the long duration of care. keeping personal and financial information secure, helping the customer manage their health care, offering the kind of plan and services needed, and resolving issues the first time.

HEALTH INSURERS FACE TRUST CRISIS

Health insurers stand at a crossroads as a new study showed consumer trust in them is critically low. A Forrester Research report showed that only 25% of noncustomers and 54% of customers described health insurers as trustworthy. The 2025 Forrester’s Customer and Brand Experience Survey revealed that health insurers scored lowest among businesses surveyed for total customer experience. The survey measures how noncustomers’ and customers’ perceptions of their brand interactions drive loyalty. Addressing customer questions with clear answers was the top driver of consumer and brand loyalty toward health insurers. Other top drivers included DID YOU

KNOW

Q U O TA B L E We have reached a critical crossroads in U.S. health care.” — Jeff Russell, president and CEO of Blue Cross and Blue Shield of Nebraska

higher hospital prices and tariffs are driving costs higher. The KFF survey found that, across the country, workers on average contributed $6,850 this year — about one-quarter of the total $26,993 average premium — for family coverage, similar to the share paid in 2024. Employers are paying the rest, an average of $20,143. The increase in average family premiums this year is slightly lower than the 7% growth rate in each of the past two years.

UNNECESSARY BACK SURGERIES COST MEDICARE BIG BUCKS SMALL-BUSINESS HEALTH PREMIUMS CONTINUE TO RISE

Employers continue to shell out more money to pay for health premiums for their workers. KFF reports that the average annual premium for family health insurance rose about 6% this year to nearly $27,000. We’re talking about an annual premium roughly equivalent to the cost of a 2026 Subaru Crosstrek. The average premium grew by more than $1,400 as new weight-loss drugs,

More than 20 0,0 0 0 unnecessary back surgeries on older adults cost Medicare $1.9 billion from 2020 to 2023, according to a new analysis from the Lown Institute. Lown Institute researchers analyzed Medicare fee-for-service data from 2021 to 2023 and Medicare Advantage claims data from 2020 to 2022 to identify unnecessary procedures done on older patients. By state, the highest number of unnecessary spinal fusions occurred in Pennsylvania, California and Florida, with at least 5,000 procedures done in each state during the study period.

Cigna said it will eliminate drug rebates in its commercial health plans in 2027. Source: Cigna

InsuranceNewsNet Magazine » December 2025/January 2026

Aim higher with Ascend annuities When it comes to your clients, don’t settle for less. Choose a carrier with the financial strength they deserve. Superior ratings A++ by AM Best. AA by S&P. Stability Fixed income investments make up nearly 85% of our invested assets. Commitment to customers More than $14 billion in guaranteed income benefits paid since 2000. Discover more

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HEALTH/BENEFITS

Can government ease the LTC crisis?

want to but because they have to.” The economic impact of these millions of family caregivers is substantial, she said. “We have trillions of dollars in wages that are being lost every year, as well as a loss of health benefits for those who must leave the workforce to become caregivers.” Some states are paying family caregivers through Medicaid, she said, and some states are training family caregivers in the basics of what they are required to do to help their loved ones. The paid caregiving workforce is in crisis right now, as fewer workers are available to help an increasing number of people who need care. The workforce crisis is exacerbated by immigration issues, Barkoff said. Providing training and support for family caregivers is one way to alleviate the workforce shortage. “We not only need to fix the formal care system, but we need to think across the systems with multisector plans that address the needs of everyone who needs and provides care,” she said.

Paid family leave would improve LTSS

States are taking the lead in addressing long-term care needs while federal support lags.

By Susan Rupe

n aging population combined with a caregiving force that is stretched to the limit means a growing need for long-term care services and support from government. But how government can provide that support and how it will be funded are questions that plague policymakers. During the 2025 Harkin Institute Retirement Security Symposium, policymakers looked at ways the federal government could increase support for those who need assistance and those who care for them. They also looked at ways some states are addressing the issue of paying for future care. 34

On the federal level: Lots of ideas, not much else

There are plenty of ideas on how to meet the nation’s need for long-term services and supports but a lack of will on how to pay for them, panelists who spoke at the symposium said. The “original sin” of federal LTSS policy was that when Medicare was created to serve the health needs of older adults, policymakers and lawmakers did not consider the future care needs of that age segment, said Alison Barkoff of the Georgetown University Milken Institute School of Public Health. As a result, she said, “We do not have a system at all” to provide for LTSS. Medicaid pays for LTSS care for those who have exhausted their resources, but is mainly focused on paying for nursing home care. Little support is available for family caregivers, who Barkoff said are 63 million strong and “are the backbone of our LTSS system not because they necessarily

InsuranceNewsNet Magazine » December 2025/January 2026

The U.S. is one of the few nations that doesn’t mandate paid family leave, and that also impacts caregiving, said Dawn Huckelbridge, founding director of Paid Leave for All. “This is creating a crisis in care,” she said. “Many people are retiring earlier than planned to become caregivers without support.” However, she noted that 13 states and the District of Columbia have passed paid family leave legislation and provide job-protected paid time off to care for a family member. The Family and Medical Leave Act provides unpaid leave “and is wildly insufficient,” she said. “It only covers about half of the workforce. Businesses with under 50 employees are not covered, and it is restricted to caring for spouses, parents and children. “It’s making a system of haves and havenots in this country.”

States lead the effort to ease the crisis

States are stepping up to respond to the need for LTSS in innovative ways. “What we are witnessing is the effects of an underfunded system,” said

CAN GOVERNMENT EASE THE LTC CRISIS? HEALTH/BENEFITS Marc Cohen, professor of gerontology at the LeadingAge LTSS Center, University of Massachusetts Boston. “The challenges we have with our caregiving workforce, our family caregivers and so on all derive from the issue that we do not have a stable source of funding going into the LTSS system.” Cohen said that as the population ages, more people are living long enough to reach the point at which they need LTSS. But he pointed out that about 40% of people who have LTSS are under age 65. The caregiving workforce is stretched thin while there is little support available for family caregivers, who perform the bulk of long-term care. “At the center of it all is the financing issue, which is fragmented,” he said. “It’s Medicaid heavy

without addressing the workforce issues,” he said. 2. Supporting family caregivers. “They are the backbone of the system,” Cohen said. He said eight states have established caregiver tax credits, 13 states and the District of Columbia have enacted paid family leave and a number of states are extending respite services for caregivers. “I think there’s an understanding at the state level that if the family support system collapses, the whole system collapses,” he said. 3. Expanding affordability and access. States are using waivers and state plan amendments to expand home- and community-based services. States are raising provider rates to expand capacity and improve wages.

The paid caregiving workforce is in crisis right now, as fewer workers are available to help an increasing number of people who need care.

and leaves middle-income people stuck in the middle.” “Because of the way the LTSS system is financed, the states are often left holding the bag,” Cohen said. “They must deal with Medicaid budgets that are crowding out other policy priorities. Many of them passed legislation to support the private insurance market, which has underperformed. There is gridlock at the federal level. The states have come to understand that the cost of doing nothing will now exceed the cost of trying to do something.” Cohen said states are testing solutions for funding LTSS in four major areas. 1. Strengthening the workforce. At least 41 states are taking a series of actions to support the LTSS workforce. States are raising wages, tying Medicaid rates to direct care pay, and standardizing training, recruitment bonuses and tuition help. “States know we can’t fix this problem

1. Inequity in access to care 2. Inequity among family caregivers 3. Inequity in the care workforce “WA Cares is not designed to fully solve the long-term care problem,” he said. “But we want everyone to have more dignity and independence in old age. That’s how we pitched this to voters. We don’t pitch this as, we need more money for longterm care, give us money. We say every family faces this problem. It’s not rich versus poor, it’s not an income redistribution program; it’s a family support program.”

California looks at LTSS

4. Supporting the private insurance market. Cohen said he is seeing some activity on the state level to support private long-term care insurance. “The need is growing, the workforce is strained and stretched, but there’s a lot going on at the state level, and our challenge is to connect those dots, take the lessons learned and think seriously about how they might be applied to federal policy,” he said.

WA Cares

and have a care need, which means needing help with at least three activities of daily living. Ben Veghte, director of the WA Cares Fund, said the program addresses three problems in the existing system:

Wa s h i n g t o n C a r e s i s a s t a t e r u n LTCi pro g r a m for work i n g Washingtonians. Funded by a 0.58% payroll deduction, the program will offer benefits starting July 1, 2026, to cover a portion of the costs associated with longterm care, such as assistance with daily living, home modifications and caregiving support. To access benefits, individuals must meet contribution requirements

With one-fifth of California’s population expected to be age 65 or older by 2030, the state’s leaders realized the issue of LTSS in that state must be addressed, said Brandi Wolf, policy and research director of Service Employees International Union Local 2015. In 2021, California developed an LTCi task force to look at the feasibility of developing an LTCi model in that state. Wolf said that while the task force made a series of recommendations, “The question is how do you fund a program? Is it a tax on employers? Is it a payroll tax on employees? Is it through state contributions?” She said changes to the task force had to address what is most politically feasible and can cover the most people. The task force has recommended several options for establishing a statewide LTCi program, although no further action has been taken. “Aging is not the big, sexy issue of the day,” she said. “So it’s our responsibility to raise this issue to our elected leaders at the state and national levels.” Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents’ association and was an award-winning newspaper reporter and editor. Contact her at srupe@ insurancenewsnet.com.

December 2025/January 2026 » InsuranceNewsNet Magazine

Financial facts and figures powered by AdvisorNews.com

Gen Xers less likely to seek retirement advice

Many members of Generation X are moving closer to retirement with a lot of uncertainty about the state of their finances. This is according to the latest findings from Northwestern Mutual’s 2025 Planning & Progress Study, which reveals that more than half of Gen Xers think they won’t be financially prepared for retirement.

Small-business owners credit advisors for their success

Small-business owners believe their financial advisor has fueled their success, according to research from Equitable and the SCORE Association. The study revealed that 83% of small-business own-

We’ll do this ourselves, too. In addition to so few Gen Xers believing they won’t be financially prepared for retirement, more than half think it’s likely they’ll

outlive their savings compared with 40% of baby boomers and older, according to the research. It’s not surprising, therefore, that

Gen Xers express the most concern about being able to afford retirement. They’re also the least likely among all generations to say they expect to leave an inheritance. An issue that is weighing on the minds of roughly half of Gen Xers is whether Social Security will be there for them when they qualify for it . That question is neck and neck with “How much will I need to retire comfortably?” among the most important retirement issues for Gen Xers. In spite of these concerns, Gen Xers are less likely than older generations to have sought professional help for their finances. In fact, the survey found that only 33% of Gen Xers currently work with an advisor.

Mass affluent confident about retirement amid concerns

Mass affluent people around the world are confident about their retirement preparedness, but there is work to be done to help them protect their nest eggs and secure

dependable income that lasts a lifetime. That’s according to a recent Prudential survey, which studied 36

Most People 67% of Americans worry that Social Security will not be available throughout their retirement. Source: Allianz Life

InsuranceNewsNet Magazine » December 2025/January 2026

ers consider it important to work with a financial professional for business guid-

ance and decision-making. The study uncovered that millenni-

al small-business owners are twice as likely to seek financial professionals

compared with their Generation X and baby boomer counterparts. Further, small businesses in the early growth phase — in operation between two and five years — are 50% more likely to engage strategic advisors than are businesses operating for more than 20 years. Those who work with a financial professional said they expect to retire seven years earlier — at age 63 versus 70

— compared with those without professional guidance, underscoring how expert advice can increase confidence and accelerate their retirement timeline. mass affluent adults in the U.S., Brazil, Mexico and Japan. The survey found retirement is changing, and it increasingly looks different for everyone around the world. For many, retirement

is less about “stopping work” and more about a new chapter of independence that

may include a blend of working, caregiving and reimagining family dynamics. However, despite their overall confidence in being prepared for retirement, the majority of the mass affluents are going it alone, without professional financial advice and other income planning resources.

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ADVISORNEWS

The missing link in LTC planning Help your clients change their attitude, behavior and habits in planning for future care. • Les Robinson

dvisors too often focus on numbers, products and legal structures. Meanwhile, the biggest barrier to successful care and retirement planning — human behavior — goes unaddressed. The missing link in retirement and care planning isn’t only about products or strategies; it’s about people’s mindsets. Changing one’s attitude is the critical first step in transforming a reactive, crisis-driven approach into a proactive and strategic one. Yet it’s also the most difficult step, especially when clients’ family members are resistant to change or unaware of the risks ahead. Long-standing habits and emotional resistance often prevent individuals from preparing adequately for care-related events that can devastate their financial well-being. From my years of working with clients, I’ve identified and refined a simple, practical process that begins with shifting attitudes of family members — what I call the “missing link” in care and retirement planning. By helping clients’ family members embrace this mindset early, advisors can guide them toward better decisions, reduce future financial vulnerabilities, and ultimately create a more secure and positive retirement journey.

A lack of understanding and mindset

One of the most impactful tools I’ve developed is what I call the missing link, the 38

behavioral and mindset shift required for successful care and retirement planning. The missing link in retirement and care planning is not a lack of resources but a lack of understanding, learning and mindset. It’s about shifting attitudes, habits and behaviors from reactive to proactive. By taking positive, informed steps in your planning process, you can transform what could be a financially and emotionally devastating event for clients into one that is manageable, secure and even empowering. The true key lies in a gradual yet intentional shift in perspective — from fear or avoidance to preparation and confidence. This subtle change, both individually and within the family or care network, dramatically increases the likelihood of a smoother, more successful retirement and a more positive care experience.

Transforming the personal mindset

1. Start with non-self-awareness conversations about care that start opening the door to attitude change. 2. Introduce small, manageable steps to develop a positive attitude toward a care event using simple planning tasks. 3. Create positive reinforcement systems — tasks that help reduce the stress of a care event. 4. Share knowledge and resources. Explain how you and your team are building a great plan. 5. The key is making gradual changes

InsuranceNewsNet Magazine » December 2025/January 2026

that build on existing strengths while creating meaningful connections to family well-being.

How do we create new habits and behaviors with our clients?

The science of behavior and habit change suggests that habits are formed through a cycle of cue, routine and reward, in which repeated behavior becomes automatic over time. By understanding and altering the mindset environment, setting clear intentions and reinforcing positive outcomes, individuals can effectively reshape their habits. The new attitudes, habits and behaviors will use resources — products or services — that clients already have but aren’t using. We can employ techniques such as personal conversations and improved communication to help clients develop new habits for care and retirement planning. The goal is to create a multigenerational planning tool that clients will trust and use. This tool will serve as the foundation for acceptance and change in behavior and commitment from family members. One significant element is often overlooked in developing a plan for care in retirement. This is one of the largest sources of stress for individuals and families, especially when it comes to managing finances during a care event and the risk of running out of money. Our process integrates attitude, behavior and habit changes into the planning process to help clients’ family members successfully navigate care and retirement planning. I developed this process and used it with my team to shift the approach to

THE MISSING LINK IN LTC PLANNING ADVISORNEWS

proactive care and retirement planning. We involve all family members in the process to ensure a positive, successful outcome. This method has proven more effective than the seminars I conduct. Our goal is simple: to shift from a negative, uncomfortable topic — family care events — to a proactive care and retirement planning event. The result is a more successful event, made possible by new attitudes, habits and behavior that contribute to a more successful outcome. This change in the approach to care helps create a more manageable and effective event, a strategy I also applied in my own personal care plan.

The need for change

Common emotional barriers include fear of losing independence, fear of getting old, reluctance to discuss care events or causal emotional denial. If advisors could develop a straightforward way to change emotional behavior, they could help clients create successful retirement and care plans. However, people cannot change unless they are willing to do so or unless they understand how these basic changes can improve their care and retirement situation. Remember, information alone rarely changes behavior; our decisions are influenced more by our environment. Three key areas for attitude, behavior and habit change regarding long-term care planning are: 1. Reducing the barriers to planning while amplifying the benefits. 2. Changing the client’s perception of events. 3. Accepting the fact that “it may happen to me.” These key areas help build a solid foundation for retirement and care plans and are essential in helping clients change to positive behaviors and habits.

Personal experience in care events

From my personal experience managing 10 care events within my family, plus my knee replacement, I have realized that having a well-structured, proactive plan is crucial for avoiding stress and financial loss during a care event.

The first care event I managed was for my grandmother. During this time, my father had a heart attack, which was aggravated by the emotional and physical strain of managing the care event. This experience deeply shaped my commitment to helping families prepare for similar situations and avoid the pitfalls of unstructured care events. One lesson I learned is that a solid foundation for care and retirement planning is essential. This foundation includes

1. People don’t always act in their long-term best interest. Our choices at the moment may conflict with our longterm desires. 2. Information doesn’t change behavior. Just knowing what we should do doesn’t mean we will follow through. 3. The environment influences our decisions. To change decisions, change the environment.

By taking positive, informed steps in your planning process, you can transform what could be a financially and emotionally devastating event for clients into one that is manageable, secure and even empowering. not only the necessary financial resources for care but also a structured approach to dealing with caregiving challenges, from emotional support to logistical and legal issues. This is the missing link that your clients’ family members need to change their behavior and habits. A well-built foundation ensures that families aren’t scrambling for resources or solutions when a care event occurs. The difference between a well-prepared family and an unprepared one often lies in the level of stress they experience. A structured care plan helps minimize uncertainty and provides a road map for navigating complex care decisions.

Updating the client’s retirement and care plans

After completing the client’s planning process, we review and update their retirement plans. We also begin preparing for the need for a care plan, which helps reduce stress, prevents overpayment for care services, preserves more money and maintains their lifestyle and independence. We begin by helping shift the family’s negative perception of a care event into a positive one, taking it one step at a time.

Using behavioral design to improve care and retirement plans

There are three key concepts in behavioral design that we incorporate into our process.

How to change emotional behavior

Let’s explore four simple techniques for a positive change in emotional behavior and habits: 1. Use simple techniques that don’t overwhelm the client. 2. Avoid information overload. 3. Focus on benefits the client is already paying for but not using. 4. Use the right words. Frame the discussion in the present tense to motivate action. For example, saying “You are getting older” doesn’t work. The correct phrase would be “Here are the things we need to do in the next 30 days to help you prepare.”

Help clients develop new habits

Advisors can guide clients in developing new habits by focusing on practical strategies to plan for the future. These strategies can reduce financial, medical and carerelated costs by addressing emotional behavior early on. Les Robinson is an advisor with Cadaret Grant and is a long-term care educator. He is the author of Protecting Your Money from Medicaid and Nursing Homes. Contact him at les.robinson@ innfeedback.com.

December 2025/January 2026 » InsuranceNewsNet Magazine

INSURTECH

How agentic AI is rewiring insurance for 2026 Agentic AI, which can autonomously plan, make decisions and carry out tasks, is expected to become prominent in the insurance industry by 2026. By Rayne Morgan

espite the reluctance of many insurance companies to fully adopt artificial intelligence, the expert consensus is that agentic AI is poised to take center stage in the insurance industry in 2026. Inci Kaya, research manager, IDC Financial Insights, suggested a growing number of insurers will make slow, steady progress to get there over the course of the next year. “Agentic AI and Gen AI, all flavors, are very top of mind,” Kaya said. Kaya “What I’m seeing is that carriers know what they want. They are not getting taken away by all the shine and gloss of generative AI and everything AI. I think you’re going to see a steady and clear-eyed, deliberate, perhaps on the slower side, but deliberate approach as to how they want to go about it.” Agentic AI is the next step beyond today’s chatbots — it doesn’t just answer questions, it can take action on its own. In other words, it can plan, make decisions and carry out tasks autonomously, all while staying under human supervision. In an interview with Insurance News Net, Kaya noted that many carriers have launched pilot AI programs, testing out specific use cases rather than opting for enterprisewide solutions. While some experts have argued against this approach, Kaya believes many companies will continue to refrain from having “everything full-blown AI,” instead opting for 40

“predictive analytics plus a sprinkle of AI.” Nonetheless, experts agree that insurers will continue to invest in AI, even in the face of recession fears and particularly as consumers, who themselves use tools like ChatGPT and Claude on a daily basis, increasingly trust it. “I don’t think the insurance companies are going to take a backseat. Initially, they’ll be risk averse, like financial services companies always are, but I think this is one of those times where it’s just too obvious and too powerful and too intuitive to sit back,” Alex Sion, head of financial services, Sion Blend360, added.

From AI co-pilots to AI agents

Franklin Manchester, principal global insurance advisor, SAS, told Insurance News Net that insurers could begin phasing out policy admin systems in favor of Gen AI “assistants” built on large language models such as ChatGPT and Claude by next year. Manchester Many carriers have already developed and engaged AI insurance co-pilots such as this, establishing a distinct market for AI-powered

InsuranceNewsNet Magazine » December 2025/January 2026

tools specific to the insurance industry. Manchester explained that policy admin systems require a substantial amount of investment and upkeep, “but you don’t actually need them to interact with your data if you’re running a co-pilot.” Rather, the co-pilot can connect directly to data just like the PAS does. “Sooner or later, a CEO and tech team are going to figure that out — and when they do, they’re not going to need the admin system in order to do their day-to-day job,” Manchester said. And Sion believes things will go even further in 2026, with tech-forward carriers graduating from AI assistants to fullblown agentic AI. “The next horizon we’re moving into is the world of agentic AI, where AI can now not only do the Gen-AI-oriented kind of question-and-answer and smart research thing, but it can also now drive and execute tasks and organize itself autonomously to not only suggest tasks but then have the power and the authority and the integration to execute them,” Sion said. He said that while generative AI “turbocharged the productivity of humans,” agentic AI will be capable of transforming organizational processes and workflows in a “much more fundamental way.” “Now you’re either skipping human steps or eliminating them altogether and replacing them with a different kind of process and a workflow that is run more

HOW AGENTIC AI IS REWIRING INSURANCE FOR 2026 INSURTECH by agents — still managed always by humans, but run more autonomously by agents,” Sion said. He described agentic AI as a “massive unlock” for insurance as “one of the most process-regulated, paper-heavy industries.” “The idea of potentially transforming the way insurance is distributed using AI-enabled conversational interfaces is not only intuitive, but it’s massive. You don’t have to think that hard to imagine a future where agents are either dramatically augmented by AI assistance or even replaced, and that technology is moving very quickly,” he said.

Is insurance ready for agentic AI?

However, Manchester believes “not many insurers here in the U.S. or globally are ready for agentic AI” just yet — and won’t be until late 2026. “Insurers are not really mature yet on their agentic AI journey. I think they’ll start seeing use cases mature in the marketplace by the end of 2026, but it will be on what I might call low-downside-risk use cases,” he said. Manchester doesn’t believe insurance will get to the point where AI agents make complete determinations without human oversight, such as when handling claims — at least for the foreseeable future. Rather, he said insurers looking to adopt agentic AI should focus on aligning digital agents with steps and processes that come alongside humans with the goal of streamlining those processes. “You have likely heard the term ‘humans in the loop.’ I want to flip that idea on its head. I want to talk about AI in the loop to figure out when you’re using agentic AI to do certain things and very long insurance processes that don’t create downside risk for you,” he said. He likened this to agentic AI functioning like a claims processor or an “entry-level position at an insurance company, where you have someone that’s helping facilitate the overall claims process, but the most experienced person in that process flow is the human and they have supervisor authority over a group of agents who are doing that process.”

‘Housekeeping’ needed: upskilling and data cleaning

Kaya pointed out that adopting AI could have a spinoff impact on the workforce in

Insurers are not really mature yet on their agentic AI journey. I think they’ll start seeing use cases mature in the marketplace by the end of 2026, but it will be on what I might call low-downside-risk use cases. 2026, which follows a thread similar to what Manchester pointed out — namely that the “entry-level” role being assumed by agentic AI could deprive newcomers of that hands-on experience. As such, she projects that workforce upskilling will accompany increased adoption of AI over the next year and well into the future, even as the industry continues to grapple with a yearslong talent gap crisis. “Number one, there aren’t enough people that are interested in joining. Number two, the tools are not necessarily in place to make it appealing for the younger generation to join the ranks. And number three, because of AI, we’re also losing that entry-level, hands-on practice chance for incoming employees to learn the trade,” Kaya said. She said that while it is nice to have AI automate low-grade processes, “the downside or the underbelly of that is that the new people coming in are kind of being deprived of the opportunity to learn hands-on.” “Now, are there AI tools like ChatGPT and Copilot and this and that to help them with that? Yes, there are. But the big question mark — and I’m not convinced of this — is are those insights that the underwriters have developed over the years available in a co-pilot setting for the new people to learn automatically? I’m not convinced of that. I’d like to see some more proof of that,” she said. Taking a step back even further, she also noted that many businesses “need to get some housekeeping done” to even prepare those AI systems to function effectively, such as structuring data and establishing governance structures. “If you can do that, you’re going to get a lot of mileage out of AI. … Governance and data are the two key things that I would like to see carriers lock down,” Kaya said. “I think that’s not going to be a one-year effort, but it’s definitely step one. Without those things, we’re just

talking; we’re just playing pretend.”

Sustained investment

Performing the recommended “housekeeping” to prepare to adopt AI requires time and investments, but Kaya said most carriers are not looking to put an end to that. Interestingly, carriers are sustaining AI investments even in the face of economic concerns. According to an IDC survey, 54% of American insurance carriers believe an economic recession is likely within the next 12 months. Even further, they’re “looking at geopolitical conflicts, economic and political uncertainty, tariffs and cyberthreats to add to the mix.” Despite this, IDC’s research found that survey respondents did not plan to reduce their budget allocations for AIrelated projects. “If they need to adjust something, they are adjusting their business revenue expectations downward if need be, but they’re not pulling money out of AI. They might be cutting out some other categories of spending, but the AI-related spending is not likely to be affected, just based on what we’ve been seeing,” Kaya said. She suggested this could be because their top priority is to grow their business and their second top priority is expanding their customer base, both of which “give us a hint as to what the AI-related use cases might be.”

Changing consumer behavior trends

Sion and Manchester similarly believe carriers will leverage AI to expand their customer base in 2026, largely because clients themselves are increasingly using AI tools to research and shop for insurance products. “The consumer side on this front, and changing consumers’ preferences in

CONTINUED ON PAGE 45

December 2025/January 2026 » InsuranceNewsNet Magazine

the Know In-depth Discussions With Industry Experts

Regulators defend close relationships with industry Critics allege conflicts of interest make it nearly impossible for state insurance regulators to objectively write rules. BY JOHN HILTON

he world of insurance regulation is very insular. There isn’t a lot of media coverage, and rulemaking is shared by 50 insurance commissioners, plus representatives from the District of Columbia and U.S. territories. It all creates an environment in which regulators craft rules in partnership with industry, a relationship that is a little too cozy for some critics. Significant issues like climate change and artificial intelligence are billion-dollar disruptions affecting the industry from end to end. Consumer advocates point to the process behind creating the Model Bulletin on the Use of Artificial Intelligence Systems by Insurers, adopted by the NAIC in December 2023. While the model bulletin makes no rules for insurance companies, it remains the most significant AI regulation to make it out of the NAIC. Critics say it is an example of how the industry regularly manipulates regulators to get the rules it wants. The consumer group Public Citizen traveled to Minneapolis for the NAIC summer meeting in August. Members staged several protests and presented regulators with a petition with over 4,300 42

signatures calling for increased transparency, elimination of conflicts of interest, and closing the “revolving door” of commissioners joining the industry. Public Citizen demanded that “every insurance commissioner adopt an Anti-Corruption Pledge that applies to all commissioners and their immediate families.” It called for a ban on gifts, meals, travel, campaign contributions, and job negotiations and offers while in office — and no lobbying for two years after leaving office. Nobody signed the pledge, said Rick Morris, insurance campaigner with

Public Citizen’s Climate Program. “Regulators are supposed to stand for the public interest over corporate power,” Morris told Morris InsuranceNewsNet. “But as climate change alters the risk landscape, it seems like they’re just handing the pen to the insurance industry to write the rules to suit the insurance industry’s bottom line. This goes well beyond simple regulatory capture. It’s regulatory surrender.”

“Regulators are supposed to stand for the public interest over corporate power. But as climate change alters the risk landscape, it seems like they’re just handing the pen to the insurance industry to write the rules to suit the insurance industry’s bottom line. This goes well beyond simple regulatory capture. It’s regulatory surrender.”

InsuranceNewsNet Magazine » December 2025/January 2026

REGULATORS DEFEND CLOSE RELATIONSHIPS WITH INDUSTRY IN THE KNOW

‘A fundamental disagreement’

Kathleen Birrane chaired the NAIC Innovation, Cybersecurity, and Technology Committee. Her current DLA Piper law firm biography identifies her as “the primary author” of the AI model bulletin. When discussions Birrane got serious, regulators had to get real, Birrane said in a recent interview. “The practical reality is that we were not going to get a bulletin that would be adopted if we tackled areas like proxy discrimination and those hot-button issues,” she said. “That’s because there is a fundamental disagreement among regulators as to that concept. So, what we did was we developed a document that was a consensus document that would allow us to address a framework.” The bulletin, Birrane stressed, is “not the last word, just the next word.” Birny Birnbaum is executive director of the Center for Economic Justice. He pushed hardest for some type of AI regulation that addressed proxy discrimination — defined as the use of a neutral factor as a Birnbaum stand-in for a protected characteristic, such as race, gender or age — in a way that leads to discriminatory outcome. Addressing proxy discrimination should be easy, Birnbaum said, because it represents both types of unfair discrimination in insurance: the actuarial basis and the protected class basis. For example, if an insurer used criminal history or consumer credit in pricing or underwriting, the apparent relationship of those data to claims may be proxy discrimination or disparate impact. Birnbaum says the NAIC’s lack of progress on developing meaningful consumer protections and insurer guidance on AI rests with Birrane. “She used her position to stop or bring them to a crawl on virtually every front,” Birnbaum said. “When the NAIC did produce a work product — like the model bulletin — it was devoid of any actual

When the NAIC did produce a work product — like the model bulletin — it was devoid of any actual guidance. guidance. The key message in the model bulletin to insurers is ‘Obey the law.’ It’s hard to see why it took years for the NAIC to develop so-called guidance that tells insurers what they already know but fails to tell them how to do it.” Birnbaum noted that Birrane went from DLA Piper to four years as commissioner and back to DLA Piper, where she is a partner and “serves as the firm’s U.S. Insurance Regulatory Practice leader.” And the NAIC still hasn’t addressed proxy discrimination in insurers’ use of big data or AI, Birnbaum noted. An important objective at the time was to “put a stake in the ground,” Birrane explained, and show the industry and the federal government that state regulators were on top of AI. She has frequently said that the bulletin is not the end. “There are next logical steps about having the NAIC develop a more granular regulatory framework,” she said. “They did some of that … with respect to accelerated underwriting last year, in providing a bit more detail about what a responsible program looks like.”

‘I already had a great practice’

Otherwise, Birrane dismisses critics who cite her as an example of a commissioner cozying up to industry. She was appointed by Republican Gov. Larry Hogan in May 2020 and asked to stay on by Democratic Gov. Wes Moore after he took office in January 2023. “I stayed two years longer than I had been planning to … because I felt really passionate about the work we were doing,” Birrane said. Her father, Edward J. Birrane Jr., was Maryland’s insurance commissioner

from 1976 to 1982. Kathleen Birrane previously served as counsel for the insurance department and had a familiarity with insurance regulation. “I didn’t go to become the insurance commissioner because I was looking for a gig that would enhance my practice,” she said. “I already had a great practice.” The NAIC does have a conflict-of-interest policy, but it is silent on regulators leaving public service to immediately lobby their former colleagues. Repeated attempts to speak with NAIC President Jon Godfread, North Dakota insurance commissioner, about the Public Citizen protest and conflict-of-interest issues were unsuccessful. The NAIC sent this statement instead: “Every state insurance regulator operates under the ethical and constitutional statutes established by the state in which they serve. In addition, as a member organization, the NAIC has a longstanding conflict of interest policy that applies to the organization, its events and activities. This framework ensures that regulators, whether elected or appointed, are subject not only to the governing laws of their respective states, but also to the commitment of the NAIC to uphold the highest standards of transparency and integrity.” I nsura n ce N ews N et Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on X @INNJohnH.

December 2025/January 2026 » InsuranceNewsNet Magazine

INSIGHTS

Finseca is the home of the top financial security professionals. This member-driven community serves as a credible source for the profession and provides exclusive access to the brightest minds in it.

Trump Savings Accounts could jump-start a wealth-building era The accounts that begin with a $1,000 seed investment could be a game-changer for families. By Marc Cadin

idden within the sweeping new tax legislation signed by President Donald Trump is a small but potentially game-changing idea: the creation of Trump Savings Accounts — investment accounts established for every child born in the United States between Dec. 31, 2024, and Jan. 1, 2029. Each account begins with a $1,000 seed investment in a low-cost, diversified index fund, and parents can contribute up to $5,000 annually. The funds grow tax-deferred and become accessible when the child turns 18, operating under similar rules as traditional individual retirement accounts. It’s a remarkably simple concept with enormous potential. When paired with a national focus on financial literacy, this program could fundamentally change how American families — particularly those without access to investment opportunities — build wealth over time. The math speaks for itself. That initial $1,000 could grow to about $8,000 44

in 20 years, $69,000 in, and more than $500,000 by retirement age, assuming historical market performance. That’s not just savings — it’s opportunity. For millions of families who’ve never had the means to invest early, it could be life-changing.

Compounding interest makes all the difference

The genius of this proposal is its ability to harness the power of compounding interest — what Albert Einstein called “the eighth wonder of the world” — to make wealth building accessible to everyone. Today, just over half of American households have investment accounts, and more than 90% of U.S. stocks are owned by the wealthiest 10% of families. These new accounts could help close that gap, giving every eligible child, regardless of background, a tangible stake in the economy from Day 1. The cultural impact could be just as profound. Too many young Americans feel excluded from capitalism or skeptical of the system altogether. But ownership changes that. A person who owns even a small piece of the market is more likely to engage with it, learn about it and continue investing. Over time, that

InsuranceNewsNet Magazine » December 2025/January 2026

confidence — like the investment itself — compounds. This is how generational wealth is built — not through redistribution, but through compounding. Unlike traditional government-provided programs, Trump Savings Accounts wouldn’t simply move money around — they’d create new wealth, and at minimal cost. The Joint Committee on Taxation estimates the total price tag through 2034 at just over $15 billion. That’s a modest investment for a policy that’s fiscally responsible, politically popular and economically transformational.

Financial literacy: The key to making it work

Even the best tool won’t fulfill its promise if people don’t understand how to use it. Roughly half of Americans lack a basic grasp of personal finance. Nearly twothirds can’t pass a financial literacy test, and more than 60% don’t have a written financial plan. Despite progress in schools, too many students still graduate without learning how to budget, invest or save for retirement. Information alone won’t solve that — we need a cultural shift. Financial planning should be as common as an annual checkup or dentist visit.

TRUMP ACCOUNTS INSIGHTS U.S. Treasury Secretary Scott Bessent deserves credit for recognizing this. Under his leadership, the Treasury Department has revived the Financial Literacy and Education Commission, partnered with the ABA Foundation on “Teach Children to Save Day” and joined the Financial Literacy for All initiative. That’s a strong start. But now, Trump has an opportunity to elevate this effort by creating a national task force of business leaders, educators and local officials to build a unified financial education strategy. A White House-led campaign could finally put financial literacy on par with reading and math — a foundational knowledge that every American needs.

The private sector’s role

The private sector also has a vital role to play. The idea of federally seeded savings accounts came from some of America’s most successful business leaders. Now, those same leaders should help advance the education needed to make this program succeed. Companies can fund community workshops, sponsor financial literacy programs in schools, offer pro bono planning services, and create tools that make learning about money engaging and accessible. Resources and expertise already exist — we just need to focus them.

Building a foundation for every family

I have the privilege of working alongside thousands of financial professionals across the country. Every day, we see the transformative power of smart financial planning. It opens doors, creates options and builds lasting wealth. But it doesn’t happen by accident — it takes knowledge, discipline and the right tools. That’s why the Trump Savings Accounts matter. They have the potential to give the children who receive them foundation to build on — a first step toward ownership, security and opportunity. Let’s make sure we give them not just the dollars, but the understanding to make the most of them. Marc Cadin is the CEO of Finseca. Contact him at marc.cadin@ innfeedback.com.

‘AGENTIC AI’ CONTINUED FROM PAGE 41 INSURTECH terms of how they shop and explore the world, is going to be the catalyst that moves things faster within the industry,” Sion said. He noted that “the idea of AI-assisted research” is already gaining popularity as more consumers are using AI tools like ChatGPT or Gemini for research instead of searching Google and clicking on web pages. For instance, a customer could use a chatbot to “ask 500 questions about the most detailed nuances of insurance.” For his part, Manchester believes one in every two Americans will use this “zero-click research” method to shop for insurance online going forward. “My prediction is that, in 2026, half of all U.S. insurance consumers are going to use AI tools to research and shop for insurance policies. And SAS’ own data from the trust imperative survey we just did with IDC actually shows that survey respondents — insurers, decision-makers — trust generative AI 100% more than machine learning,” Manchester said. “It’s extremely powerful, and the interfaces will force insurance companies to think differently about the way that they deal with sales, marketing and distribution on the digital channel alone,” Sion added. However, Manchester also noted a potential downside to AI-savvy customers: bad actors who can use it for fraudulent ends. He believes the industry will see an increase in AI-related fraud in 2026 as usage, and expertise, ramps up. “We are starting to see alarming reports about the number of claims that have been submitted using AI forgeries, so using generative AI to create documents, text, video, emails, et cetera,” he said. He cited data from the National Insurance Crime Bureau that estimates around 10% of insurance claims contain some element of fraud, and said he believes that figure will double over the next year. “I expect that number, in 2026, is going to double. Insurers will see 20% of all claims contain some element of fraud due to generative AI. These tools are becoming ubiquitous, and they’re showing up more and more from a

fraud perspective, not just here in the U.S., but abroad in other countries where insurers are doing business,” Manchester said.

An AI-powered future

In the face of opportunities and challenges, Kaya is optimistic about where the insurance industry will take AI in 2026. She noted that while carriers have had a slow, cautious start, many have gone from feeling skeptical to feeling more confident. “If you look at the conferences and industries and all the speaking topics, the issues have evolved away from bias and hallucination and they have evolved more towards how can we capitalize on this more solidly,” she said. She acknowledged that successful AI adoption will depend on leaders getting buy-in from their teams and cultivating “supportive sentiment in the company to make sure people aren’t feeling like they’re being left behind or their jobs are at stake.” “I think the readiness is there,” Kaya said. “It’s just a matter of internally identifying the use cases they want, getting their data house in order and governance in order, maybe getting some kind of a chief AI officer who’s going to be able to manage and understand both the business considerations and the technical considerations. If you have those, I think you’re in good shape to reap the benefits.” IDC Financial Insights is a global research and advisory firm that provides data analysis and consulting services to financial institutions. It was founded in 1964 and is based out of Massachusetts. Blend360 is a global services company that provides AI solutions and transformation for financial institutions and organizations. It was founded in 2015 and is based out of Maryland. SAS is an AI, data management and analytics organization founded in 1966 at North Carolina State University. Rayne Morgan is a journalist, copywriter and editor with over 10 years’ combined experience in digital content and print media. You can reach her at rayne. morgan@innfeedback.com.

December 2025/January 2026 » InsuranceNewsNet Magazine

INSIGHTS

Founded in 1890, NAIFA is one of the nation’s oldest and largest associations representing the interests of insurance professionals from every congressional district in the United States.

Consumers need human advisors – and more of them Studies show consumers want to work with professionals, while the industry must cultivate the next generation of advisors. By Kevin Mayeux

ightning-fast advances in computing and artificial intelligence are transforming our society, the ways we work, and how everyone consumes goods and services. It would be naive to think the revolution will bypass the insurance and financial services industry. If you are a practicing agent or advisor, a quick look at your email inbox is enough to reveal fintech offers for any number of new digital tools and AI solutions. And while it is important for insurance and financial professionals to understand this technological transformation and adopt tools that benefit their practices and clients, it is equally important to know that your role remains as vital as it ever was. It sometimes seems like a contradiction that a profession so steeped in numbers and calculations — tax rates, income-replacement ratios, required minimum distributions, income-related monthly adjustment amounts — is in fact deeply rooted in personal, human-to-human connections. Despite all the technology tools at your fingertips, it remains crucial for agents and advisors to nurture relationships with families and business owners who need not only insurance and financial products but also the guidance, understanding and reassurance you provide. The numbers, graphs, charts and analyses may help ease your clients’ minds, but at the end of the day, the people you serve are counting on you.

The human touch

This year’s Insurance Barometer Study, an annual project by NAIFA’s Life Happens community and LIMRA, bears this out. 46

According to the report:

» 75% of consumers want the help of a

professional during the life insurancebuying process, and 42% of those want help “early” or “very early” in the process.

» 78% of adults say they trust financial professionals.

» 94% of those who work with financial professionals trust them.

» 70% of adults work with a financial professional or are seeking to work with one. Of the remaining 30%, their reluctance in many cases is based on misconceptions involving the cost, value and availability of help.

The study shows that consumers have an enduring need for guidance. The profession’s future is strong, and federal government statistics bear this out. The finance and insurance sectors of the economy represent over 7% of the U.S. gross domestic product and employ 6.7 million people. The Bureau of Labor Statistics projects job growth of around 4% over the next 10 years in the category of “Insurance Sales Agent,” amounting to around 47,000 job openings annually. In the financial planning space, job growth is forecast to be around 10%, or 24,100 openings per year. In fact, the market demand for insurance and financial services is likely to soon outstrip the ability of professional agents and advisors to deliver them. A shortage of financial professionals is looming.

Encouraging the next generation

The Barometer Study found that 42% of people between the ages of 18 and 50 are either “somewhat likely” or “very likely” to consider becoming a professional financial or insurance advisor or planner as a career path. The next generation of

InsuranceNewsNet Magazine » December 2025/January 2026

financial professionals — whether they are new to the workforce or midcareer changers — is out there. They just need our encouragement. NAIFA 2025 President Doug Massey recently told the audience at the association’s National Leadership Conference that when he first joined NAIFA, he found it strange to be sitting down with so many of his business competitors and helping them succeed. But he came to realize that the core value of his profession is about helping American families and businesses achieve financial security and prosperity. Sometimes, he said, that involves working with your competitors — helping them out and getting their help. This is a message I encourage all agents and advisors to take to heart. If we want this profession to remain vibrant, trusted and impactful, we must take responsibility for building its future. The need for professional guidance is growing, but without a strong pipeline of new advisors, we risk falling short of what American families and businesses deserve. If you’ve found purpose and prosperity in this field, now is the time to step forward as a mentor, a guide and an advocate. Share your story. Open doors. Tell new colleagues that associations like NAIFA are here to help. When we commit to cultivating the next generation, we’re not just preserving the profession; we’re also elevating it. A stronger community of financial professionals means a stronger future for everyone you serve, and that’s a legacy worth preserving. Kevin Mayeux is the CEO of the National Association of Insurance and Financial Advisors. Contact him at kevin. maye ux@ innfe e d back.com.

FSP is a multidisciplinary organization where financial professionals can build their professional network, enhance their knowledge base and grow their practice.

One door closes, another door opens What you need to know about mandatory Roth catch-up contributions. By Ernest Guerriero

nder the SECURE 2.0 Act, a change regarding Roth catchup contributions will have an impact on both employers and employees participating in 401(k), 403(b) and governmental 457(b) plans, primarily starting in 2026. The rule does not apply to SIMPLE IRA plans. This will also open a planning opportunity for advisors.

catch-up deferrals and those wishing to make catch-up contributions. Financial plans may need to be altered. This means these catch-up contributions will be made using after-tax dollars, reducing the immediate tax deduction but allowing tax-free withdrawals in retirement. Employees earning below the threshold can continue to choose between pretax and Roth catch-up contributions if their plan offers a Roth option. The standard catch-up contribution limit for employees 50 or older is $7,500. There’s an enhanced catch-up contribution of $11,250 for those aged 60 to 63, but this reverts to $7,500 at age 64. Employees

Those high earners who were using the pretax catch-up as a tax planning option will clearly be impacte as their effective tax rate will likely increase as will their marginal tax rate. Beginning Jan. 1, 2026, employers must make a reasonable, good-faith interpretation of the rule to implement the Roth catch-up requirement until compliance with the final regulation. There will be mandatory Roth catch-up on employees who are aged 50 and older and earn more than $145,000, at the time of this writing. It would also appear that with cost-ofliving adjustments, this may increase to $150,000, but we will not know that until the IRS announces all cost-of-living adjustments to retirement plans. This will impact those individuals making current pretax

must understand these rules and plan their retirement contributions accordingly; this is especially true for high earners who will be subject to the mandatory Roth catch-up. It is also important to note this only impacts those with wages for purposes of Social Security taxation. This amount is reported in Box 3 of Form W-2. Those who do not have FICA wages, partners with self-employment income, sole proprietors, and employees of exempt state and local governments are not subject to the Roth catch-up rule.

The opportunity for advisors and high earners

Where is the opportunity? Those high earners who were using the pretax catch-up as a tax planning option will clearly be impacted, as their effective tax rate will likely increase as will their marginal tax rate. A solution for these individuals would be to offer a nonqualified deferred compensation arrangement, thereby securing the pretax nature of their compensation. This will be especially the case if their existing plan does not offer a Roth option. A nonqualified option may be a solution to maintain the tax deferral for a select group of managers or highly compensated employees. Although unfunded and subject to the claims of the employers’ creditors, it could be a viable option for the group of employees who drive the employer’s profitability. This is clearly impacting on a tax diversification strategy and may alter current planning; adjustments may have to be made. While the benefits of tax-free income are good, the benefits and leverage of tax deductions are equally beneficial. Of course, all options regarding this solution must be weighed, and employees are strongly encouraged to work with their tax and legal counsel. Ernest J. Guerriero, CLU, ChFC, CEBS, CPCU, CPC, CMS, AIF, RICP, CPFA, is the past national president of the Society of Financial Service Professionals and currently a board trustee for the National Association of Insurance and Financial Advisors. He is the head of Business Sponsored Retirement Plans at the Business Resource Center of Guardian Life. Contact him at ernest.guerriero@innfeedback.com.

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December 2025/January 2026 » InsuranceNewsNet Magazine

INSIGHTS

More than 850 financial services companies in more than 70 countries turn to LIMRA first to help them build their businesses and improve their performance.

Financial professionals can help tomorrow’s retirees achieve financial security More advisors are putting client investments into annuities, as preretirees seek guaranteed income.

more client investments into annuities, and this ranks as the most popular change in investment strategy.

Industry education efforts continue

By Bryan Hodgens

ver the past several years, there has been a great deal of attention focused on the huge number of baby boomers retiring. More than 11,200 Americans are turning 65 each day — equating to over 4.1 million a year. LIMRA research shows a majority of retired investors with at least $100,000 in investible assets have access to a pension, providing a guaranteed lifetime income stream. For those approaching retirement, the landscape is quite different. According to LIMRA studies, only 40% of preretiree investors (workers aged 50-75 who plan to retire within 10 years) have access to a pension, which means many more will have to rely primarily on their personal retirement savings to fund their retirement. LIMRA finds less than half of these preretirees (46%) believe they will be able to cover basic living expenses in retirement with their guaranteed income sources, compared with 67% of current retirees. This is one of the factors that has led to greater interest in annuities. In fact, nearly half of preretirees (49%) said they would consider buying an annuity, yet only 1 in 5 reports currently owning one.

Annuity product enhancements attract new customers

Carriers have expanded their annuity portfolio to help financial professionals address their clients’ unique risk profiles. Rising interest rates have enabled carriers to offer better participation and cap rates, making annuity products more attractive. 48

LIMRA annuity sales studies show the annuity products that are driving market growth are addressing the risks that clients are most worried about — market volatility, inflation and running out of money in retirement. Sales of fixed-rate deferred annuities, which offer investment protection with guaranteed growth, tripled from $52 billion in 2020 to $153 billion in 2024. Sales of registered index-linked annuities and fixed indexed annuities, which offer different levels of principal protection with the opportunity to enjoy market gains, more than doubled during the same period. While economic conditions — increased market volatility and rising interest rates — have propelled the remarkable growth in annuity sales over the past few years, the role of the financial professional should not be underestimated. Recent Alliance for Lifetime Income by LIMRA data show three-quarters of investors who receive an annuity recommendation from their financial professionals will go on to buy an annuity. Today’s broader annuity product offerings and recent economic shifts have prompted financial professionals to alter how they advise their clients. Two-thirds (65%) of financial professionals say they have changed their retirement investment advice to respond to client concerns about market volatility, inflation and rising interest rates. Half say they are putting

InsuranceNewsNet Magazine » December 2025/January 2026

The industry has made progress raising awareness about the value of annuities with both consumers and advisors. According to our research, consumer awareness and understanding of annuities has increased from 36% in 2020 to 44% in 2024. Advisors’ favorable view of annuities has jumped more than 20 percentage points since 2021. The impact of that advice is clear. Close to half (48%) of investors who are working with an advisor say they are interested in an annuity, compared with just over a third (38%) of investors who are going it alone. This also shows up in consumers’ confidence in their retirement income strategy. In 2025, 45% of investors surveyed said they are confident in their overall retirement income plan, but 70% of those who are working with a financial professional felt the same. Over the last 15 years, LIMRA research shows consumers’ top concern has been achieving financial security in retirement. In 2025 with the acquisition of the Alliance for Lifetime Income, LIMRA expanded its mission to engage and educate both consumers and advisors about the valuable role that annuities can play in providing the financial security consumers seek. We believe these efforts will help a greater number of current and future retirees attain the retirement lifestyle they desire. Bryan Hodgens is senior vice president and head of LIMRA Research. Contact him at bryan.hodgens@ innfeedback.com.

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